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Does Beijing’s Commercial Crypto Ban Signal a Further Govt. Crackdown?

Last Updated March 4, 2021 3:57 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:57 PM

Commercial venues located in Beijing’s bustling downtown district have been banned from hosting cryptocurrency events, igniting speculation over whether China’s government is moving to tighten the noose on the industry, which continues to thrive despite last year’s trading ban.

According to a report published on Chinese-language outlet QQ , local authorities in Beijing’s Chaoyang district have circulated an order, dated Aug. 17, warning businesses such as office buildings, hotels, and shopping malls that they must not host events that promote cryptocurrencies, leading at least two organizations to cancel scheduled events on short notice.

At face value, the new restrictions seem relatively benign, and many observers, including Malcolm Lerider, senior R&D manager at the China-based NEO, suggested that it would have little impact on the wider cryptocurrency industry in Beijing, much less the rest of the country.

However, Dovey Wan managing director at venture capital firm Danhua Capital (DHVC), said that she believes the order is an extension of the cryptocurrency trading ban that the central government first implemented last year.

She explained :

“Chaoyang is a very symbolic district, what’s considered as the ‘center of the core power’. Also the propagation of narratives in regulatory environment does not need an official national wide documents in China, this already sets the tone.”

Wan further noted that Chinese regulators commonly revisit the effectiveness of specific policies on their one-year anniversaries to determine whether further actions are necessary. The anniversary of China’s cryptocurrency crackdown, Sept. 4, is quickly approaching, and she said that she is concerned the clampdown on public cryptocurrency promotion could be a portent of further government action.

Notably, the order’s publication came at the same time that reports emerged in local media outlets such as Lanjinger  that social media giant WeChat had placed a ban on cryptocurrency-focused media outlets. That action particular could prove very disruptive to the local cryptocurrency industry, given the ubiquity of this communication channel in the region.

Featured image from Shutterstock.