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Cryptocurrencies have been on the rise, and China becomes the first country in the world to test out a national cryptocurrency.
The Central Bank of China, the People’s Bank of China, has previously developed a prototype of a digital currency that could be part of the circulation in the near future, which is planned to be introduced together with the yuan, China’s primary currency.
Creating their own cryptocurrency can post a lot of benefits for the country as it will help decrease the transaction costs, which makes financial services a lot accessible, especially to Chinese people who are not connected to conventional banks.
However, despite the optimistic view of China towards cryptocurrency or bitcoin in general, it has been firmly against the cryptocurrency market and cryptocurrency mining. Chinese authorities have long been planning to shut down the cryptocurrency exchanges in the country, which will effectively close the trading market for all digital currencies.
With the previous cryptocurrency news in China, prices for major digital currencies such as Bitcoin and Ethereum has significantly plunged.
Recently, the Chinese government has also announced its plans for a crypto crackdown. Several local exchanges based in the country have halted their operations since then, putting out announcements that they will no longer be able to serve all their domestic users. The recent move of crypto firms in China came after Chinese regulators issue several notices and warnings in line with their cleanup act to get rid of digital currency trading in the country.
The recent frenzy in the cryptocurrency industry in China came after Chinese President Xi Jinping suggested that the country is pro-blockchain, noting that China is expected to make its national digital currency public. However, China is against other digital currencies muddying its financial industry.
In the past weeks, the central bank of China has already ordered the shut down for crypto firms in the country and warned market players and the Chinese people to be wary of the other digital currencies. Further, social platforms in the country have also suspended the accounts operated by some of the major exchange and blockchain platforms, such as Tron and Binance Holdings Ltd.
The recent waves of shutdowns and restrictions of several crypto firms in China represent the big cleanup the country is trying to do in line with their cryptocurrency shutdown since the initial clampdown the Chinese government started back in September 2017.
And while crypto exchanges have been banned in the country, digital currency trading has remained rampant through services that deal with cryptocurrency assets only or through over-the-counter platforms.