It has only been a few short months since China instituted its ban on cryptocurrencies and ICOs or Initial Coin Offerings. Before China’s crypto ban, China was the dominant cryptocurrency market, and there were claims that China accounted for 90% of Bitcoin transactions. While that figure was most likely exaggerated, it was a substantial percentage. Since the ban was put into effect that number has been reduced less than 1%.
The Chinese cryptocurrency ban has also been very effective with the elimination of cryptocurrency exchanges and cryptocurrency trading platforms. Chinese media reports that regulators have successfully closed down all 88 cryptocurrency exchanges. This was primarily the result of using the PBOC in prohibiting the ability of Chinese citizens in funding their trading accounts. The Great Firewall of China has been able to keep foreign cryptocurrency brokers out.
China’s crypto ban has also seen great success in blocking access to ICOs. The ICO market was a more significant concern to regulators. Rampant fraud was happening in many of the early ICOs and many Chinese investors fell victim. Government officials were growing with the fears of social unrest as a result of fraudulent Chinese ICOs.
Recently it wasn’t the government but the weather that had an impact on Chinese Bitcoin Miners. Sichuan province is a hub of Bitcoin mining since it offers cheap electricity. Heavy rains and massive flooding had hit the region hard. Estimates are that 10% of Bitcoin mining activity could be affected.
The Chinese government claims that it is perfectly fine with “Blockchain” and that the government will sponsor and develop projects with the private sector. Questions remain if a total ban remains and China is in complete isolation if China will implement effective blockchain projects.