(Yicai Global) March 19 -- China recently took the dramatic step of blocking the exchange of domestic bitcoins from the country altogether. As a result, many of those who are interested in cryptocurrency have looked overseas for alternative exchange options.
The Chinese authorities have stressed that the restrictions are necessary to maintain law and order in the country and to safeguard national security. CNBC states that a start-up company raised a fund of $1.27 billion by selling digital coins. The fear factor according to the Chinese government is completely valid because cryptocurrency poses a threat to the country in terms of financial risks such as illegal fundraising, financial fraud, pyramid schemes, and cybercrime. The concerns include the following specific claims:
- Digital coins are a scam
- Retail investors can get hurt
- The government needs a proper law in place (as China is the epicenter of cryptocurrency)
It might sound harsh, but caution should never be condemned as a bad thing, and businessmen and entrepreneurs should certainly not lose hope. Here’s why:
Cryptocurrency Is The Future Of China
Bobby Lee, CEO, and co-founder of BTCC said that it's just a matter of time. Once a proper system is in place on how to license the digital coins so that it does not affect the retailers and common people, there are high chances that China will be lifting the ban on cryptocurrency. There was no significant effect in the crypto market because of China’s ICOs ban; in fact, the market has seen a growing interest in using digital currencies safely.
Digital Coins Are Not Leaving The Modern Technology
There are suggestions that ICOs are out of control and that without proper data security it will be difficult to keep a track of all the money and fundraising activities. But the technology cannot be blamed for that. As is the case across the world, the Chinese government will need a little time to come up with certain regulations and norms for ICOs, but the overall impact on the cryptocurrency market in China will be positive.
Governments Will Have to Learn to Adapt
Governments the world over have found cryptocurrencies a challenge in terms of how to categorize and regulate them, and in this respect, China is no different. The fact is that cryptocurrency is the future of the finance industry and the upcoming technology market is always ready to invest in digital coins. With China being the hub of technology, there is little chance that the authorities will allow the nation to fall behind, and it is only a matter of waiting till the right time to join the game.
There have been many financial frauds and cybercrime cases recorded with respect to cryptocurrency and regulations are still to catch up, as it is tricky to keep abreast of the growing technology. Irrespective of the constant threat to security, if people trust the technology, it's convenient for them to use and is a cost-effective way to stay in the market.
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