So it seems the other shoe has dropped when it comes to cryptocurrencies and China:
China banned on all crypto transactions and vowed to root out mining of digital assets, delivering the toughest blow yet to the industry.
Crypto-related transactions will be considered illicit financial activity, including services provided by off-shore exchanges, the People’s Bank of China said on its website. It added that cryptocurrencies, including Bitcoin and Tether, are not fiat currency and cannot be circulated.
Bitcoin slumped in the wake of the announcement, falling 8% to about $41,000 as of 9 a.m. in New York. [Bloomberg]
Which can be seen here:
Source: Buy Bitcoin Worldwide
And China’s not content with that:
Chinese officials are going further to stamp out crypto trading for its ties to fraud, money laundering and excessive energy usage. China already has rules that bar banks from offering crypto-related services. To get around such rules, traders have moved to over-the-counter platforms and offshore exchanges.
But this fellow thinks removing 1/7th of the world’s population from the target market isn’t important:
“China’s ban on all cryptocurrency trading activity will have some short-term impact on the currency’s valuation, but long-term implications are likely to be muted,” said Ganesh Viswanath Natraj, an assistant professor of finance at Warwick Business School.
I think someone has his reputation – or his fortunes – riding on cryptocurrencies.
I think other governments may follow suit, because an independent currency is a threat to the control such governments believe they need to survive. China is not the only autocracy in the world threatened by freedom.
And the United States isn’t the only democracy in the world threatened by the ransomware enabled by cryptocurrencies.
In the end, I think there’s a fair chance that clever people using an almost-clever tool will smash that tool into uselessness. The profligate use of physical resources to prop up a redundant currency is a serious enough problem; that it’s used to enable crimes that harm society, without bringing an invaluable positive with it to the table, marks it for doom.
Says da non-economist sitting in this chair.
