China is once again stepping up its enforcement of policies prohibiting cryptocurrency trading, amid reports that domestic traders have managed to circumvent these restrictions by accessing offshore exchanges.
That’s according to a report in Shanghai-based publication Yicai, which said that the department in charge of supervising the country’s public communications networks had begun closely monitoring offshore cryptocurrency exchanges, in addition to domestic websites used by traders and investors to facilitate peer-to-peer (P2P) trades.
The department has placed particular scrutiny on cryptocurrency exchanges that were formerly headquartered in mainland China but relocated their operations in response to the fiat-to-cryptocurrency trading ban, which was put in force by the People’s Bank of China (PBoC) last September.
The government claims that it has implemented these policies to prevent pyramid schemes, money laundering, and other fraudulent activities associated with the cryptocurrency industry.
Despite actively policing these cryptocurrency trading venues, authorities have spent the ensuing months struggling to maintain enforcement of those stringent policies, as small-scale traders have begun trading through P2P and over-the-counter (OTC) platforms, while others have successfully opened accounts at offshore platforms that offer conventional order-book trading.
Nevertheless, in many respects, authorities have been largely successful in their quest to curtail trading — even if they have failed to stamp it out entirely.
As CCN.com reported, these restrictions caused cryptocurrency trading volume denominated in the Chinese renminbi (RMB) to plummet from a peak of 90 percent to a present value estimated to be less than one percent.
Many cryptocurrency skeptics expected that such a dramatic drop-off in China-based trading would spell doom for Bitcoin and its competitors, but those predictions have been proven wrong.
Indeed, this squeeze on mainland RMB trading failed to have a lasting effect on the global cryptocurrency markets, and both South Korea and Japan and have emerged in the incident’s wake as major forces in both the regional and global ecosystems.
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Last modified: May 20, 2020 9:03 PM UTC