The notice, issued in tandem with nine other government agencies, including the Bureau of Public Security, declared all related business illegal and warned that cryptocurrency transactions originating outside China will also be treated as crimes.Įxplaining the ban, China’s official Xinhua News Agency reported Friday that cryptocurrencies have disrupted the controlled economy’s financial systems and contributed to crimes such as money laundering.Ĭryptocurrencies - digital commerce tools that aren’t linked to a centralized banking authority - first appeared in China around 2008. 24, the People’s Bank of China, Beijing’s monetary authority, released a statement saying cryptocurrencies lack the status of other monetary instruments. “The real impact we’ve probably seen though is in the miners, and most of those miners the process of shifting overseas or already completed moving overseas,” he said.
“The exchanges have been pushing offshore anyways, and with the exchange business you need cloud infrastructure, you need developers, you need management to move things in the right direction, and so whether that is sitting in Taipei, San Francisco, Singapore or Shanghai, it doesn’t really matter - those businesses are very virtual,” said Zennon Kapron, Singapore-based founder the financial consulting firm Kapronasia. The shift highlights how virtual currencies can evade government regulation. Exchanges of the digital money and the numerous Chinese startups linked to the trade also are expected to rebase offshore after dropping domestic customers from their rosters. Since China’s government declared all cryptocurrency transactions illegal last week and banned citizens from working for crypto-related companies, the price of bitcoin went up despite being shut out of one of its biggest markets.Įxperts say large-scale Chinese miners of cryptocurrency - the likes of Bitcoin and Ethereum - will take their high-powered, electricity-guzzling servers offshore.