China's ban on cryptocurrencies could harm the economy

China's cryptocurrency ban could harm the economy - Bitcoin china2Leading Chinese regulators escalated the war on all cryptocurrency transactions and mining on Sept. 24, targeting Bitcoin and other major currencies and putting pressure on cryptocurrency and blockchain-related stocks.

The price of bitcoin actually dropped $ 2.000 on the day

Last Friday's statement represented the most expansive ever, underlining Beijing's commitment to halt China's cryptocurrency market which it believes could undermine the government's control over financial and monetary systems.

It also marked the first time Beijing-based regulators have joined forces to explicitly ban all cryptocurrency-related activities. Ten agencies were involved, including the central bank, financial, securities and currency regulators.

However, speaking on Taking Stock's THE ANALYSTS segment with Kaliah Reynolds, Taylor said he could see the country miss out on potential business opportunities.

With the ban, all businesses that accept cryptocurrency payments are forced to stop. The new rules also make it illegal for anyone to even maintain an account with a foreign company that offers cryptocurrencies.

"It's a big deal and for the size, for the country on the scale of China and the level of business they do around the world is obviously a big concern for the people who were trying to make that their main form of transaction. or payment, ”Taylor said.

China has been trying to crack down on cryptocurrencies for some time

China's efforts to eradicate cryptocurrencies date back to around 2019, when authorities moved to limit the amount of transactions that could take place. In May of this year, the Chinese government also promised to crack down on Bitcoin mining and trading citing green energy concerns. Taylor said the series of business was ironic, with China being one of the forerunners of financial technology (fintech) solutions. He said some also believe authorities are pushing on a particular agenda, having launched their own central bank digital currency which offers more control over the cryptocurrency market.

"Their logic is that cryptocurrencies have no intrinsic value, they are not tied to a particular economy or commodity, they are really based on supply and demand and as such they believe that exposure can be harmful to citizens as they people can lose their life savings if they dump it in cryptocurrencies ”.

Taylor said that while he has his own personal apprehension about cryptocurrencies based on their volatile nature, he doesn't see Chinese developments having a long-term effect on global businesses.

Meanwhile, Bitcoin is advancing in the rest of the world

His comments are in line with international analysts who said that despite the initial shock of Chinese news, they do not expect the crackdown to affect global cryptocurrency prices in the long term as companies continue to adopt crypto products and services.

“The fact is, despite this move by China, there are still many countries around the world that are still accepting cryptocurrencies. It offers a new form of payment and because it has this value attached to it, people are excited to do it, established banks in the US accept it and offer it as an investment product for their customers, ”he argued.

El Salvador recently became the first country to make Bitcoin legal tender, even though their first day was greeted by problems and protests. Elsewhere, payment provider PayPal has also started offering cryptocurrencies as a financing option, find out how to buy Bitcoin with PayPal.