China cracks down on crypto and blockchain events

Analysts believe the new measure is in response to the slowing of the country's economy and the decline of the yuan against the dollar

The Chinese government has issued a ban on all commercial cryptocurrency and blockchain events in the country, which comes as a surprise after it allocated $3 billion to speed up innovation in these areas.

The ban calls on all local police and financial authorities to ensure that no blockchain-related events take place in offices or hotels.

No clear reason for the ban

The government has not made it clear why it has gone down this route, but experts believe it could be related to the slowing down of the country’s economy and the steep decline of the yuan, which has lost 5% against the US dollar in five months.

READ MORE: China’s government publishes blockchain guide for officials

Other experts note that because the government is enthusiastically in favour of blockchain technology and is even mulling the launch of an official cryptocurrency, Chinese leaders are not attempting to prevent the industry from progressing, but rather control its use and implementation.

Series of steps to block crypto

The move is the latest in a number of steps the country’s central government has taken to block access to decentralised crypto assets. This week, China’s largest social media network, WeChat, announced a ban on all crypto accounts and ads.

READ MORE: China reverses opposition to Bitcoin and hints at regulation

International news outlets suggest there’s a connection with the ban on crypto with the government’s creation of a task force to crack down on investors and millionaires who are believed to be evading taxes by storing their wealth in overseas markets.

Right before announcing the $3 billion blockchain fund to put China at the forefront of the revolutionary technology, state-owned television network CCTV said blockchain could have an impact on the global economy exponentially more significant than  that of the internet.

READ MORE: China praises blockchain, aims to be global science centre

Blockchain is the second era of the internet. The value of blockchain is 10 times that of the internet. The blockchain is the machine that produces trust,” CCTV reported.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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