After three attempts of banning bitcoin, the Chinese government has come up with a ban again and this time it is all commercial events related to cryptocurrencies. This time the ban is more shocking because as China has nearly spent USD 3 billion dollars on funding blockchain firms
What could have possibly gone wrong
Why the crackdown in China is still surprising and the reasons behind it are still unknown. Famous news reporter Joseph Young, who covers Asian cryptocurrency space in detail, also tweeted with the same surprise,
After banning Bitcoin three times, I thought there was nothing left for China to ban.
After spending $3 billion on funding blockchain firms, China now bans all commercial events related to crypto.
Weird stance. Asks local agencies to speed up blockchain dev then bans all events https://t.co/kJDzRPUgtR
— Joseph Young (@iamjosephyoung) August 22, 2018
Whatever information could be gathered and if Chinese Daily, South China Morning Post is to believe China has shut down numerous blockchain-related news accounts on the WeChat social app, and banned hotels in downtown Beijing from hosting events promoting cryptocurrencies. At least eight blockchain and cryptocurrency-focused online media outlets – some of which raised several million dollars in venture capital – found their official public accounts on WeChat blocked on Tuesday evening, due to violations against new regulations from China’s top internet watchdog.
Tencent, the operator of WeChat, said in a statement that it has shut down these accounts permanently as they are “suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading.” The blocked accounts on WeChat come from some of the most popular blockchain news platforms including Jinse Caijing and Huobi News, whose apps and sites are still in operation. It cited regulations enacted earlier this month by the Cyberspace Administration of China, which, among other things, demand content providers within chat apps comply with “national interests” and “public orders.”
In its statement, Beijing-based Huobi, which also operates one of the world’s biggest cryptocurrency exchanges, acknowledged the shutdown of its news account as WeChat’s “broad action targeting industrial media.”
All was good at the start of 2018
Although the government had previously banned cryptocurrencies, its stance at the start of 2018 was fairly positive. This is one of the reasons this news of ban comes as a super shocker for local analyst and experts. Earlier this year, CCTV, the state-owned national television channel of China, reported that the blockchain could have an impact that is 10 times larger than the Internet had on the global economy and society.
“Blockchain is the second era of the Internet. The value of blockchain is 10 times that of the Internet. Blockchain is the machine that produces trust,” CCTV reported.
The positive comments of CCTV were followed by the bold decision of the Chinese government to allocate at least $3 billion to fund emerging blockchain projects and startups, to remain at the forefront of blockchain development.
In April 2018 A new Chinese blockchain fund worth USD 1.6 billion was launched. This fund that was dubbed as Xiong’An Global Blockchain Innovation Fund was set up to invest in innovative startups – 30 percent of which is backed by a city government.
The Chinese government also had emphasized on several occasions that Blockchain technology has the potential to disrupt the global financial structure. The state-owned newspaper The People’s Daily had also noted at the start of the year that
“The mainstream Blockchain technology platforms all originated from abroad. The domestic Blockchain technology service providers should patiently start from the ground floor to make technologies independent and controllable, and strive to lead global Blockchain technology development.”
With the Chinese government’s stance changing again, the growth of blockchain in the country seems to have crippled again. All the promise that the country had shown at the start of the year seems to have gone down the drain.
What could be the possible reason behind this ban imposed by the Chinese government? Do let us know your views on the same.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.