Banning cryptos, a short-term view – It was in May 2021. China then made a resounding statement banning bitcoin mining on its territory. The country was not at his first attempt, of course, having already banned Bitcoin several times depending on the mood of the day. But, this time, the market took it the wrong way, so to speak, unscrewing at the time of several tens of thousands of dollars in the space of two weeks. To resume its race a few months later. However, China may well end up being remorseful. Decryption.
Crypto ban, China is killing its fingers?
Turning your back on a technological revolution in the making is never a wise choice. France and its precious Minitel are the perfect example. China, on the other hand, may well follow a similar path by banning Bitcoin and cryptos. Indeed, in the short term, the choice could seem judicious for the government. It thus rules out a potential competitor to its digital currencyTHE e yuan, and ensures a little more control. But in terms of future geostrategic domination, in the duel between them and the United States, the deal doesn’t look so good.
By banning Bitcoin mining, China lost much of its dominance in controlling the network. Share who has migrated’ largely to Texas, in the heart of the territory of its great rival, the United States. A mining which moreover turned out to be a financial godsend and a support in the management of the Texas electrical networkno offense to the detractors of these mining farms.
And these remorse, Huang Yipingformer member of the monetary policy committee at the People’s Bank of China (PBoC) begins to express them loud and clear. For him, the Chinese government should reflect once again on the question of ban cryptos. The main subject being: is this ban sustainable in the long term?
During a speech last December concerning the future of Chinese FinTech, he indeed began to express certain doubts. A permanent ban from cryptos could lead to a series of missed technological opportunities. Including in particular the potential contributions of blockchain and tokenization in the traditional financial system.
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Chinese ban, towards a step back?
“Banning cryptocurrencies may be practical in the short term, but determining whether it is also practical in the long term deserves careful study. »
Huang Yiping
The former official is also worried about the regulation of this new cryptoeconomy which, according to him, will not be easy to find. Of that, there is no doubt indeed. When a new UFO appears in the technological landscape, it is always necessary to grope in search of compromise. There European regulation MiCa in progress or recent controversial parliamentary initiatives demonstrate it.
However, Yiping insists that Bitcoin in his view remains more of an asset than a currency. Highlighting its lack of intrinsic value. And he also puts the cover back on the “significant” part of the network used for illegal transactions. In truth, this share is about 0.24% for Bitcoin according to data from Chainalysis. Indeed, what sane criminal would use the huge public ledger that is Bitcoin? A real open book in which everyone can look at what everyone is doing? Whereas in euros or dollars, it’s so much more opaque and concealable.
But as a good financier, you don’t recover, even with a vision a little more enlightened than your colleagues. Yiping’s speech is on the whole logical, but must not however to be held to be true.
What if China reversed its Bitcoin ban? Certainly, the impact on cryptos would be more than positive. But this choice would once again discredit China on the international scene. And within a crypto sector which, over the months, escapes him more and more. There is no doubt that one day, without reaction on its part, China will fall behind that it will no longer be able to catch up. Just as today’s Internet giants are American, those of cryptocurrencies could become so too, if the other regions of the world do not allow them. leave no room for development.
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