Once a major player in cryptocurrencies, China has made recent moves to ban ICOs and force out mining operations, as well as engaging in an ongoing struggle to curb cryptocurrency trading. It’s left the former trailblazer with almost no cryptocurrency industry at all. Meanwhile its neighbors continue to warm to digital assets and their potential for growth.
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China Slams the Industry Shut
Last year China banned ICOs and, in a widely anticipated move, shut down domestic cryptocurrency exchange platforms.
It then set its sights on mining. Rather than imposing an outright ban, it took regulatory measures to effectively force the industry offshore, seeking friendlier jurisdictions in Iceland and Canada.
The Chinese government continues to put pressure on investors, warning them to avoid engaging in “illegal cross border activities” (i.e. using exchanges outside the country or investing in ICOs abroad).
From Admired Example to Anomaly… Asia Moves in a Different Direction
Just as the global industrial giant is moving against the cryptocurrency industry, her neighbors are gradually warming to it. South Korea, after a great deal of conjecture and widespread fears of an impending ban, finalized its position on the industry in January. Cryptocurrency exchanges would be legal, regulated, and require Koreans to trade under their real names. It has since been vocally encouraging of the nascent industry.
Japan has long been crypto-friendly. With China no longer competing for trader attention, Hong Kong-based exchanges KuCoin and Binance have become giants in the industry in little time. The Bangkok Post reported yesterday that Thailand had decided to legalize and formalize the industry, classifying virtual coins as digital assets, rather than currency.
Malaysia is thought to be warming to digital currencies, with regulations in place to target money laundering but no outright ban on coins. It has adopted a crypto-tolerant position. Indonesia does not recognize cryptocurrencies as legal tender, but continues to allow exchanges to operate.
China’s Waning Influence
China’s influence over the region has grown exponentially as its economy expanded over the past thirty years. It has become many Asian nations’ most or second-most important trading partner. However it has also created an example for more authoritarian-leaning regimes of how to control the political space.
With the recent and continued softening of approaches toward cryptocurrencies, however, could it be that China’s influence in the region is falling? Perhaps that flagging domination will remain in the digital space. Yet it just might be a sign of growing regional fatigue with China’s emerging superpower status.
What do you think? Is China moving in the wrong direction in cryptocurrencies? Why are they not able to influence the region in the digital space? Let us know your thoughts in the comments below.
Images via Pixabay