As the market cap of cryptocurrencies has grown to the point where mainstream financial industry players are jumping aboard the blockchain bandwagon with greater fervor than ever, and NFTs make headlines (and paydays) for famous and obscure celebrities alike, regulators in Beijing and Washington are ramping up their efforts in the space, each in its own way. In China, the moves are headline-grabbing, interventionist, and as frequently with China, perhaps less than meets the eye. Meanwhile in Washington, the approach is shambolic, incrementalistic and, as always in Washington, heavily influenced by the industry subject to the regulation. But both paths lead to greater government control over the cryptocurrency industries.
On Friday, September 24, 2021, China’s central bank announced that all transactions of crypto-currencies and cryptocurrency mining are illegal, intensifying the country’s crackdown on cryptocurrencies such as Bitcoin. Friday’s statement is the latest and most comprehensive effort yet in China’s commitment to halt cryptocurrency activity in the People’s Republic.
In its announcement, the People’s Bank of China (PBOC) stated that overseas exchanges are barred from providing services to China-based investors and that cryptocurrencies, including Bitcoin, are not fiat currency and cannot be circulated. The PBOC justified its action, stating that such activity “seriously endangers the safety of people’s assets.”