Impact of China declaring crypto-currencies illegal, including bitcoin during last week, put the whole word in the impact. Since 2019, it has been an official ban in China, but still allows online trading via foreign exchange. Last week’s announcement makes it so clear for national crackdown and seizure of illegal wealth if you continue to possess and involve in the trading.
To see the whole picture, it series of action that from target technology giants, follow with real estate and properties, declare for crypto-currencies illegal make it difficult for wealthy citizen to hide their wealth, in particular for those who accumulate their wealth in various means during former government era, and top government officer family related businesses.
The China government instructed banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins. China, with its relatively low electricity costs and cheaper computer hardware, has long been one of the world’s main centres for mining. Most powerful graphics cards are actually used by miners for processing crypto-currencies. In September 2019, China accounted for 75% of the world’s Bitcoin energy use alone.
We will expect a fall or collapse of the crypto-currency market price from now onward. For those who continue to possess crypto-currency is now considered committing a crime and will be prosecuted. Whether crypto-currencies and blockchain industry future how it will go will be challenged by this last week’s announcement. We expect to see a shift in the power and redistribution of the crypto-currencies from most of the China traders’ hands to others. For those who can not sell off what they possess in hand in the short notice, for sure got to trading in much lower than market price as it is now in the sell down condition globally.
This action, paired with the recent China action to target those real-estate properties giants, is believed to be one of the series of activities to shrink some of the wealth elite’s power rise during the former government era.
This action will most likely be followed by other nationals who intend to centralize the national money control by declaring crypto-currencies illegal, as most of the country’s citizens are more on speculative trading rather than really use it for other commercial purposes.
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