Better Safe than Sorry
The recent China crypto ban and its implication
If culture is capable of anything, then it is finding that which unites us all
The ban is supported by more than 10 government bureaus and institutions, compared to previous iterations where People’s Bank of China was the main figurehead.
The ban brings stablecoin such as Tether to day light.
The ban covers not only crypto trading, but also adjacent industries that promotes crypto ( news outlets, OTC trading, and technology services, and needless to say, token launch activities).
The government will have no obligation to protect citizens who willingly buy into crypto schema ( no more protests in front of the city halls!)
Mining: No additional implication since miners have already left China after the May ban.
Mining pool: Spark Pool, the largest Ethereum mining pool, said it will stop providing services to miners based in mainland China.
Centralized Exchanges: both Huobi and Binance have halted new registration from China. Huobi has also deleted China from its list of countries / regions on Apple Store.
DeFi: Loopring, a zkRollup protocol, and Debank, a DeFi wallet, have stop Chinese IP from access its service. One DeFi protocol has completely shut down its official crypto wechat group.
Tether tanked, per usual.
The ban itself is not rhetorically different from the previous bans, but it could be enforced more rigorously, given that number of government departments are involved.
The Chinese crypto community, including DeFi protocols, is taking a better-safe-than-sorry approach by blocking Chinese users. The risk of being investigated is too high, both in terms of physical and business safety.
There’s very little impact to the wider crypto community because the May ban has already shocked the market. Plus, we all know that CEXes have always been sheep-in-government-mouth. They are becoming increasingly irrelevant.
What could be concerning, still, is potential crackdown on OTC trading. This, will inevitably estrange Chinese retail investors, and perhaps even High Net worth Individuals, further from access the global crypto market. That would impact crypto from a demand shortage perspective.
Many crypto WeChat groups are now moving to Telegram or Discord
Time to remain 100% anon for crypto builders, if that’s ever possible
“We are gradually shutting down Chinese business, which is honestly fine. Most of our users are international anyways.” an anonymous DeFi founder told me.
Chinese crypto builders must look abroad and adjust the way their organization is structured, marketing messages delivered, and more importantly expectations are met.
The golden days of building crypto empires by feeding off China’s large consumer base is gone.
The ban is a catalyst to crypto’s decentralization. Long DeFi. Long decentralized mindsets.
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