What’s China’s Relationship Like With Bitcoin and Blockchain?

Once upon a time, trade relations between Renminbi (RMB) from China and Bitcoin were massively popular. However, if we go by reports, that is no longer true.

According to recent news, the trades between RMB and BTC have dropped significantly in the last few months. In December 2017, the currency trade between these two giants comprised of more than 90% of the bitcoin trades on a global level. However, now, the Chinese currency trade has plummeted to a shocking 1% out of all the trades of bitcoins on a global level.

So, what is the reason behind this sudden downfall and the complicated relationship between Bitcoin and Blockchain? According to Xinhua, a state-run press agency of the government of China, the country had banned initial coin offerings (ICOs) last year and effectively put an end to direct trading between RMB and virtual currencies, including bitcoin, since there were financial risks involved in the rapidly growing market. This ban was ordered apparently due to the volatility of the market.

According to the statement of a blockchain analyst to Xinhua, the actions “effectively fended off the impact of
sharp ups and downs in virtual currency prices and led the global regulatory trend.”

That said, this is not the first time Bitcoin has suffered a rough patch. Lately, it has been all over the news following a wild rollercoaster ride of ups and downs. Late June saw the prices of bitcoin plummeting to an all-time low (below $5,800) due to hacks and regulatory crackdowns. This is a disappointing number if we consider the bitcoin value at $20,000 last year.

While it is apparent that the Chinese government is slowing down its operations on cryptocurrencies and bitcoin, its interest in the blockchain technology remains intact as it constantly passes policies that are blockchain development-friendly. What’s left to be seen is whether or not this complicated relationship will continue being complicated in the
future.