Crypto: Beijing Imposes Radical Control On Banks

As the world of finance turns to China, all eyes are on its recent decisions regarding digital assets. If a strategic turnaround were to soften its position, it could mark a true peak for bitcoin and its counterparts. But for now, Chinese authorities are tightening their regulatory framework. With their new rules on foreign exchange, crypto transactions are now under strict control.

Chinese crypto regulation: towards a total lock-down

China, currently facing unprecedented economic challenges, has just established new Chinese rules requiring banks to scrupulously track the identity of individuals and institutions involved in crypto transactions. The goal? To uncover activities deemed at risk, such as money laundering, cross-border gambling, and underground banks.

🚨🇨🇳 BREAKING $NEWS: CHINA TIGHTENS CRYPTO RESTRICTIONS WITH NEW FOREIGN EXCHANGE REGULATIONS

BANKS REQUIRED TO MONITOR TRADERS’ IDENTITIES & FUND SOURCES TO COMBAT CROSS-BORDER CRYPTO ACTIVITIES AND ILLEGAL TRANSACTIONS pic.twitter.com/2qb4EvR2Xx

— blockchaindaily.news (@blckchaindaily) January 1, 2025

These measures, reported by the South China Morning Post, also aim to prevent the use of the yuan to buy cryptocurrencies before exchanging them for foreign currencies.

According to Liu Zhengyao, a lawyer at ZhiHeng, this tightening provides an additional legal basis to punish the trading of digital assets.

“The new rules make it almost impossible to circumvent Chinese restrictions through cryptocurrencies“.

Some striking figures:

• 194,000 Bitcoins held by China, from judicial seizures;
• An estimated total value of 18 billion dollars;
• Rank: second country in terms of Bitcoin ownership.

Despite this apparent opposition, these assets give China a paradoxical position: that of a key player, despite an overt hostility towards cryptocurrencies.

Bitcoin in China: paradox and unexplored potential

Despite its banning of cryptocurrencies in 2019, China could, according to some experts, change course rapidly. Changpeng Zhao, former CEO of Binance, recently presented an inevitable scenario at an event in Abu Dhabi:

“If China decides to adopt a Bitcoin reserve strategy, it can act very quickly. It will have to do it sooner or later.“

The crackdown on mining was justified by the desire to reduce greenhouse gas emissions and energy consumption. Yet, the assets seized from illegal activities remain under government control, a glaring contradiction that could serve as a support for a potential strategic shift.

China still holds immense influence over the global cryptocurrency market. Its decisions are likely to disrupt crypto exchanges and propel BTC to new heights.

Arthur Hayes, former head of BitMex, seems to whisper in the ears of Chinese leaders that bitcoin could very well be a winning ticket for a forthcoming bull run.