China reaffirms anti-cryptocurrency stance

A few weeks ago, many members of the cryptocurrency community were praising China’s President Xi Jinping for endorsing blockchain technology.

The president’s pledge to accelerate blockchain development in China unwittingly sent the price of BTC skyrocketing by a massive 42% in just a few hours.

It also caused stocks in Chinese blockchain A-share firms to max out at their 10% limit the following Monday.

However, in the wake of the frenzy the president unleashed, he’s now firmly setting the record straight.

Since his endorsement of blockchain, Xi Jinping has been very vocal in his efforts to remind the world that he’s not a fan of cryptocurrencies. Neither is he the “Crypto Dad” that many Bitcoin supporters and social media users were labelling him.

It’s the immutable and unprecedented tracking qualities of blockchain technology that China is interested in for financial applications, the supply chain, and local governments. The narrative remains firmly “blockchain, not Bitcoin”.

In fact, rather than relaxing China’s stance on Bitcoin and other cryptocurrencies, its grip may be tightening instead.

Xi Jinping calls cryptocurrencies ‘financial fraud’

President Xi Jinping gave a speech today on CCTV1 (the CCP’s official channel). While the English version of his speech is not immediately available, co-founder of crypto investment holding firm Primitive Ventures Dovey Wan provided a quick summary.

She said that the president criticised cryptocurrencies and brushed them off as unregistered securities, “financial fraud”, and illegal Ponzi schemes.

Binance and Tron banned from Weibo

In addition, Bloomberg reported today that two large players in the cryptocurrency space – Binance and Tron – were banned from popular Chinese social media platform Weibo last week. The mainstream media stated that this “appears to be fresh steps to crack down on digital currency trading”.

According to Bloomberg, both companies will be appealing the decision to Weibo and are currently working to restore their accounts.

Watchdogs call for a ‘clean up’ of cryptocurrency companies

In addition to social media crackdowns, Shanghai watchdogs have issued a notice to “clean up” companies that are trading in cryptocurrency. Beijing also warned against illegal exchange operations.

The Chinese central bank and Shanghai’s financial regulator also advised local government agencies to either cease doing business with any companies related to cryptocurrency or to do so only under its supervision. Regulators are apparently concerned over the resurgence of another speculative bubble.

While Bitcoin hasn’t tanked on the news, it has entered its fourth consecutive day of downward price action amid concerns over Chinese restrictions.