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Bitcoins in China – what is their current status

Cryptocurrency takes over the world, as with every month, it gains more and more popularity.

Until recently, a similar statement could also apply to China. However, with the current status of Bitcoins is slightly different than some time ago. What has changed, and is it legal now to mine and use cryptocurrency? Find out below.

Bitcoins and cryptocurrency – a few words of explanation

The two terms, Bitcoin and cryptocurrency, are often used interchangeably. However, it’s worth noting that those aren’t precisely the same notions. Bitcoin is a cryptocurrency, but a cryptocurrency not necessarily must be a Bitcoin.

To explain it as simply as possible, cryptocurrency is a virtual currency that you cannot have physically in your wallet. It is usually based on blockchain technology. The most famous cryptocurrency, and the one that has started its popularity, is Bitcoin.

Cryptocurrency is not regulated by any national system of banking and finances. It enables transactions outside the official system, without the interference of third parties. It’s both cryptocurrency’s asset and a reason for severe criticism.

To gain new Bitcoins, there is a need to use computer power. Every Bitcoin is a reward for a user whose computer solved a complicated puzzle, a “block” of verified transactions. It might for some seem complicated to understand how cryptocurrency and mining work, but not impossible to comprehend.

How cryptocurrency can be used?

Cryptocurrency gained its popularity because of anonymity and transactions only between the two parties involved. Experts are not sure about the future of this type of virtual currency and whether it will become a standard way of payment for everybody or rather a worldwide banned phenomenon. Today, cryptocurrencies like Bitcoins are used not only to make transactions, purchases or to settle an agreement but also for entertainment, e.g., online Bitcoin casinos that allow the use of cryptocurrency instead of traditional money. Sites like VegasSlotsOnline offer entirely safe and secure access to such platforms, the only difference being the nature of financial matters.

Current status of cryptocurrency in China

The last years haven’t been kind for those who opt for using cryptocurrency. Since 2019, trading virtual currencies like Bitcoins is banned. However, until recent months, foreign exchanges were blooming online. People still used cryptocurrency, but this year has brought the biggest change of all.

The first steps to eliminate cryptocurrency from use were taken in May 2021. Official institutions in China started to warn users that they have no protection when trading with virtual currencies, including Bitcoins.

The next month brought another step toward the complete elimination of virtual currency from the Chinese market. In June, official institutions ordered banks and payment platforms to not facilitate any transaction made with Bitcoins and other such currencies. What’s more, mining of cryptocurrency was specified as banned.

The last step of this process took place in September 2021. China officially declared that cryptocurrency transactions are considered illegal.

People’s Bank of China justified this decision by claiming that cryptocurrency is a threat to the properties of people and the economic order of the country.

It is undoubtedly a great change for the country, as a few years back, China was responsible for almost 90% of the world’s Bitcoin trade. That is quite a turn, right? The question remains if that is a change for the better. Once even big coffee shops and other spots in the heart of China, Beijing, accepted Bitcoin payments from their customers. Now, everything is entirely changed.

Trading and mining are illegal, but those who want to know more about the cryptocurrency business quite often meet obstacles in the form of explanations and warning why using Bitcoins is a wrong practice.

After China banned any action related to cryptocurrency, USA took its place on the market. Now, the US leads Bitocoin mining and trade, taking the place of the previous leader. The whole change was rapid and, for many, unexpected, with a slight collapse on the market, but the Bitcoin world is once again gaining strength.

Conclusions

China was once a leader in trading and mining cryptocurrency, and its use was widely popular among the citizens of the country. Quick action entirely changed the industry and pushed China away from this virtual currency world. It doesn’t mean, however, that Bitcoins are in decline, but they’re rather getting more and more popular.

Image source: pixabay

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