China's Crypto Diplomacy: 10-Year Impact | Coin Informer

TL;DR

Over the past decade, China has significantly influenced the cryptocurrency landscape, with restrictions escalating from early warnings to wide-ranging bans. This article reviews key events in China's crypto policy and their global impact. For background timelines, see CoinDesk’s history of China’s crypto bans and CoinGecko’s country-by-country overview.

Key Takeaways

China has been involved in cryptocurrencies since 2011, with Bitcoin gaining popularity.
The Chinese government has implemented several restrictions on Bitcoin and cryptocurrency trading over the years.
The 2021 ban on Bitcoin mining and trading had a significant impact on the global cryptocurrency market.
China's actions in the crypto space continue to affect investor behavior and market dynamics.

A Complete Overview

China's involvement in the cryptocurrency market has evolved over the last decade. While the 2021 ban surprised many, it was not entirely unexpected given China's history of regulating Bitcoin.

2011: Growing Interest in Bitcoin

Satoshi Nakamoto invented Bitcoin in 2009. Initially, it was not well-known in China, but by 2011, interest in Bitcoin began to grow. The launch of Bitcoin China, a centralized exchange, played a crucial role in popularizing Bitcoin in the Chinese market.

2013: Bitcoin Popularity Surges, and China Outlaws Cryptocurrency

In 2013, Bitcoin's popularity surged in China, with many businesses adopting it as a payment method. However, the Chinese government took steps to restrict Bitcoin trading. The People's Bank of China (PBC) prohibited financial institutions from dealing with virtual currencies, making it more difficult for citizens to access and exchange Bitcoin.

2017: China Outlaws Crypto ICOs

During the 2017 crypto boom, the prices of Bitcoin and Ethereum rose significantly, attracting many Chinese investors. In response, the Chinese government banned initial coin offerings (ICOs) due to concerns over scams and unlicensed ventures. This led to the closure of many ICO websites and exchanges, including Bitcoin China, which rebranded to BTCC and moved its operations to the UK.

2021: Use of Crypto Ban in China

In 2021, China officially banned Bitcoin mining and all cryptocurrency transactions. This decision led to a significant decrease in Bitcoin's hash rate. The ban also made it illegal for employees of Chinese companies to invest in cryptocurrencies, affecting individuals, companies, and institutions.

In a Nutshell

China's restrictions on cryptocurrency have had a profound impact on the global market. The 2021 ban significantly affected Bitcoin's hash rate, and while the market is recovering, some Chinese investors continue to trade covertly.

Sources

China ban timeline overview: China Crypto Bans: A Complete History (CoinDesk)
Restrictions context + key dates: 18 Countries Where Bitcoin Is Banned or Restricted (CoinGecko)