Nevertheless, the Chinese authorities with great distrust accepted the appearance of the phenomenon of digital money in the financial market. In 2013, the People’s Bank of China declared war on cryptocurrencies and forbade them to be accepted as money, yet had nothing against individuals buying them. In 2014, the ban also affected the sale of cryptocurrency.
It is not surprising that not only the Chinese economy but also the cryptocurrency ecosystem as a whole lost a lot from such decisions. However, China not only understood the prospects that cryptocurrencies and blockchain open up for the state in the global financial arena but even prepared to launch its own national cryptocurrency — crypto-yuan, which experts predict is such a great future that it can compete with the US dollar.
The prospect of decentralization and the outflow of capital outside of China was not accepted favorably, and therefore in 2017 China banned ICOs, which brought down the cost of Bitcoin by 6%. The incident did not prevent crypto trading from developing in this state, but many participants in the turnover of digital currencies had to switch to foreign crypto exchanges.
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Also, this state has developed a huge infrastructure of miners, whose activities were suddenly threatened with a crypto ban. China explained this draconian initiative by caring for the environment, which allegedly suffers from excess electricity consumption. The mining process requires quite a lot of electricity. There was a lot of talk about the ban on mining in 2019 and it was put on hold, but so far there has not been a direct ban.
In October 2019, a cryptocurrency regulation law was passed in China. It refers to a single state standard and a centralized cryptographic agency. Government agencies in China want to control citizens' passwords. China has also taken a serious course towards victory in the cryptocurrency race — and in 2020 launched its national cryptocurrency in test mode in several regions of the country. Rumor has it that its development has been conducted since 2014. A full launch of Chinese national cryptocurrency is planned for 2021.
If China succeeds (and the authorities are serious), it has every chance of overtaking even the United States in this race. Unfortunately, state ambitions for this country still prevailed over the interests of users. Much will depend on how quickly citizens understand the crypto-yuan potential and believe in it. China is the second country in the world, practically independent of oil prices, and the digital yuan can bring it to a whole new level.