What if China uplifts the crypto ban? What will happen to Bitcoin and other cryptos? There's a possibility of China unbanning crypto which we will discuss in this article.
China to unban crypto is one of the craziest things the market will experience after the 2021 crackdown. The Chinese government has since then taken a harsh step towards crypto trading.
China is one of the major key players in deciding the fate of the world economy as it shares almost 19% of the global GDP. The Crypto market was enjoying the 2021 bull run with many big names like Elon Musk, Michael Saylor and many firms started supporting Bitcoin when China came like a black curtain.
Let’s see how China banned crypto previously, what led to the ban and the possibility of China unbanning crypto.
China has a lengthy history of implementing crypto restrictions, with the People's Bank of China (PBC) issuing guidelines prohibiting financial institutions from transacting in virtual currencies such as Bitcoin in 2013.
This first restriction was intended to stifle Bitcoin trading, which had grown so popular that many firms, including China's top search engine Baidu, began taking it as payment.
During the crypto bull market of 2017, the Chinese government raised penalties on crypto trading, focusing specifically on Initial Coin Offerings (ICOs). The trading of ICOs, which are digital tokens that represent an ownership stake in a new crypto project, has increased significantly.
Due to a lack of regulation, many of these ICOs turned out to be scams. China prohibited all sites that offer ICOs in order to put a stop to the ICO mania. If an exchange sold ICOs, the money has to be returned to the investors.
China implemented the harshest anti-crypto measures in its history in 2021. As Bitcoin approaches $55,000, China's State Council declared an official ban on cryptocurrency mining.
Shortly after, the hash rate on Bitcoin's network decreased by half, and the price of Bitcoin plummeted to around $30,000 in the months that followed.
The possibility of China unbanning crypto depends upon various factors. Keyur Rohit, a renowned crypto expert and analyst just dug into the matter very deeply.
Keyur Rohit claimed in a series of tweets that the likelihood of China lifting its prohibition on cryptocurrencies has sent shockwaves throughout the digital currency market.
The constraint, which was enacted in response to worries about scams, money laundering, and capital flight, may be reviewed if China embraces the emergence of Central Bank Digital Currencies (CBDC) and launches its own digital yuan as we have discussed above.
After the ban, The hash rate quickly recovered, raising the question of what would happen if mining activity returned to China. The Analyst believes that such a move might catapult the market to unprecedented heights, with far-reaching consequences for the whole crypto environment.
While rumours circulate and the market buzzes with excitement, signs appear to point to China potentially relaxing the crypto prohibition.
If this rumour proves true, the global crypto market will witness unparalleled growth. Demand is likely to surge, prices to skyrocket, and the world could witness a historic digital currency revolution.
However, experts warn that it will not be all plain sailing. Market volatility may increase, regulatory hurdles may occur, and authorities may be confronted with new issues linked to this emerging business.
Despite these potential stumbling blocks, the potential rewards exceed the risks, making the probable lifting of the crypto ban a game-changer that many have been anticipating.
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