The Bitcoin situation has grown pretty complicated over the past few weeks. With all exchanges winding down soon, things aren’t looking all that great. It also appears OTC and P2P trading platforms will be scrutinized moving forward. The bigger question is why these developments are taking place right now. It appears the PBoC is threatened by private digital currencies.
For the longest time, cryptocurrency enthusiasts have wondered when banks will be replaced. More specifically, cryptocurrencies possess the power to successfully dethrone financial institutions quickly. Until now, very few banks effectively took a negative stance toward Bitcoin. The PBoC is a very different creature in this regard. Forcing exchanges to shut down is seen as a last-ditch effort. It also highlights how desperate the institution is getting right now.
PBoC Is Afraid of Bitcoin
More specifically, it appears some people close to the matter confirm as much. It is certainly true China’s economy becomes more digital every quarter. However, all of these solutions are tightly controlled by the government and central bank. Cryptocurrencies such as Bitcoin pose a major threat to this brittle ecosystem. Monetary authorities in the country do not take kindly to cryptocurrencies right now. Nor will they change this stance anytime soon, that much is certain.
However, it is unknown whether or not these measures are temporary. It would make sense to allow private cryptocurrency trading again in the future. It is obvious the PBoC doesn’t want to hinder its own chances of success. At the same time, missing out on this new financial ecosystem can be a catastrophic decision. No one in the Bitcoin world will care much about China missing out, though. In fact, they took matters into their own hands without properly thinking this through. The PBoC will have to suffer the consequences of this decision one way or another.
Rest assured other countries are fearful of cryptocurrency as well. It is certainly true Bitcoin is uncontrollable, which is a positive sign. Central banks are digging their own grave for quite some time now. Cryptocurrencies pose a legitimate threat thanks to their global availability. Moreover, it is a far more transparent system than what banks will ever provide. The PBoC has made a grave mistake in trying to ban Bitcoin, that much is evident.
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