Topic: Former President Introduces Reason Behind Crypto Crackdown (Read 250 times)

And that is the issue, they cannot allow their citizens to move their wealth freely because if they could then they would get all of that wealth outside of the country and the Chinese government will collapse in a heartbeat, obviously they do not want that which is why they have forbidden the use of bitcoin and any other cryptocurrency, in a way I understand their position, they want to keep themselves in power and bitcoin is a threat to that, but making it illegal will not erase its existence and people will use it anyway to get their wealth out of the country.

But, I feel that they have got afraid of cryptocurrencies as cryptocurrencies must be a tough competitor for their CBDC. I mean there could be lesser possibilities that they would have bothered about the problems that you have mentioned. If they have not introduced digital yuvan, then there could be a possibilities as per your reasoning.

If they are really going by "survival of the fittest" theory, then what is the need for banning crypto mining?

If they work for a fair environment where people will have all the options to choose based on their own preferences then they must have taken a neutral stand against all cryptos activities by letting the fittest to serve their people.

The worse can be when the government ban bitcoin and try not to open up the digital aspect of their fiat currency. CBDC makes it a little easier though not the same. Like China did Yuan CBDC and some countries have adopted. But even country ban bitcoin, the P2P is not still active for traders is not a good one because the world has gone digital and payment platforms should also follow up.

Well, I don’t think that is enough reason for them to completely ban Bitcoin from their country, they should have at least allowed it to stay and maybe look for ways to settings the weather would like it to be. I don’t really see anything bad when people are investing in Bitcoin, because right now Bitcoin is like my favorite investment. Even if I do not invest in any other asset, I am sure going to invest my money in Bitcoin.

So, I cannot imagine a scenario where the government in my country bans Bitcoin to the extent that I wouldn’t be able to have access to it. Even the CBDC that is being issued by central banks doesn’t really excites me ‘cause he said no need to me. Central bank digital currency is the same thing with Fiat, it has the same value on everything.

These problems that they have raised are valid.

But are any of them enough to warrant a flat-out ban? I don't think so.

There is clearly some sort of agenda outside of the fact that network fees are higher etc. that is pushing this ban forward. Pushing CBDCs in lieu of decentralized cryptos is probably always a necessary thing for the central bank to do to maintain their control, and it's not just China.

Being superior or making themselves to be the most powerful country in the world neither on West or  Easy it doesnt matter which they do have this kind of aim and mentality and decisions been made will be totally connecting out on whats their motive on the first place.

They could  really make out decisions for themselves without minding other factors or things around or depending or basing up into something.

They could make out decisions on whats up into their minds and if they do saw that it is totally countering the essence of centralization then
it wont really be surprising on how they do deal up with crypto.

China always has 'different' or 'better' views against the rest of the world. They always believe that their ideology, economy, and everything about them is far superior than their Western counterpart. If the Chinese believes they can produce something better than bitcoin or crypto, why then would they need to ban it if they can easily counter it, and that if their citizens would gladly support it? The issue here perhaps is control on the wealth that is currently circulating inside China. Bitcoin and crypto provides an easy avenue for the Chinese to take their wealth somewhere else, so the best solution for this is to ban it and prohibit their citizens from using it at all.

The former president of the People's Bank of China, in my opinion, did not express a clear position of the government regarding cryptocurrency and in this connection it recently banned mining and circulation of cryptocurrency. I think that China is preparing for the official launch of its digitized yuan and in order for it to work effectively, they are removing possible competitors, which is a decentralized cryptocurrency. In this regard, it was now beneficial to make such a decision.

On the surface the systems may look different but all the economies of the world are based on fiat currencies and a government which is more and more intrusive in the lives of their citizens, so while particular policies and practices may be different we see a similar end result, especially when it comes to the potential adoption of bitcoin, but that does not really matter since the best currency always imposes itself, we know this is a historical fact and it will happen again, just give it enough time.

There are lots of things I am yet to know about this central bank digital currencies. How is this CBDC going to function? Is it going to be a currency that will be issued out directly from the central bank to the people or is it going to be going through smaller banks to be distributed to the people? And then another thing is that I don’t really think that this CBDC will match up to the current digital currencies we have (or should I say decentralized cryptocurrencies), such as Bitcoin.

Why I think this is true is because with Bitcoin you can do any transaction to any location around the world, but is it going to be the same with this CBDC?  If the CBDC is going to be Fiat, then it’s going to only function within the country that owns it , and is not going to be a currency that you can send to someone else that is in another country.

I've heard that they are planning to unban the mining due to price surge. They also talked about the researching about unbanning crypto too but nonetheless,it doesn't matter anymore due to the fact that large investors doesn't want to play with china anymore. Migration of large mining industry players has already been done and theres no coming back to it. https://www.independent.co.uk/life-style/gadgets-and-tech/bitcoin-china-ban-mining-crypto-b1944928.html

Always believe that China has a reason behind every action. When they stopped mining, but in the end they really didn't want anyone to move and outperform the Chinese financial system itself. Even under any pretext, if only for the sake of centralized transactions, there is no need to prohibit the party providing free space for anyone to choose decentralized payments. The bottom line is that China doesn't want finances to flow outside of their control. Even for a penny, they would consider it a huge loss.

While China's economy is very much unlike other mainstream economies in the world in certain respects, I think I still consider it a traditional economy in the sense that it is still a fiat-based economy. China's economy is indeed unique. Its socialist market economy offers a hybrid approach which allows both capitalism and private ownership to exist and thrive alongside a larger and more powerful and influential state-owned business sector. However, at the end of the day, they share a common ground with the rest of the world's traditional economies. Theirs is the power and control of money. This is something they simply cannot let go. And that's the primary reason why China will never ever adopt Bitcoin as a currency.

Even if someone from CCP says something right, just ignore them, ignore them at all times. They are bunch of horrible people who have done horrible things, even the ones who didn't do anything horrible still must be involved in those horrible things and fine with it because nobody who is against it would be actually going up in that world.

China just banned crypto because they were afraid people would get more freedom, and they "may" do their own digital money because they want to follow where the money is flowing, so that they could check who is getting richer and come down on them and get their money. That is the real answer, do not read whatever BS that guys said.

Your first statement is all what we need to know about this situation, politicians are experts are trying to confuse people and give long explanations that make no sense, if what they are about to implement could be way better than bitcoin then they could just let the market run its course and select the best coin, but they know they cannot compete so they are banning bitcoin and giving some wild explanation about why this is the case.

None of what you stated are valid reasons to ban cryptocurrency and it just disguises the real underlying reason that no CCP party member will ever be willing to admit. The CCP wants absolute control of everything happening within China, it looks like Xi Jinping did not learn from Mao's mistakes and wants to recreate them on many levels. Instead of opening up to the world and becoming more transparent, the CCP chooses the path fo hostility and making outsiders the imagined threat whenever economic turbulence comes along. Having everyone controlled internally means being able to control money which might otherwise be able to escape the country along with its owner if times got much worse.

very illogical when they claim that they found better but on the other hand they forbid what is not in line with what they are doing. okay talking about china i feel they have quite advanced thinking and are one or two steps away from some other countries.
but it is very unfair when they say that by banning crypto from developing.
Isn't this obvious to make their project run smoothly and the people there can't take any other option than the cdbc they made?

They didn't have to ban it even though these reasons might be viable for some regions since banning them is straight away not only taking the freedom away from the people but at the same time they are lagging behind, since now bitcoins is the world's 8th most valuable asset people might be more comfortable if they had the chance to hold their investments instead of selling them.
- plus I think most of them will anyways do it illegally and that would be worse for the government, they should have tried to regulate it instead of banning it plus they could have very easily traded them with their new central bank cryptos and it might have helped give both of them a boost. They are just making excuses since they were not able to control bitcoins they decided it was not worth the try.

In a country with a totalitarian regime and new vectors of suppression of "too free" sectors of the economy, digital currency is primarily a control. Total control over the movement of funds, over interactions between various entities both in China and abroad. With cash, these solutions are either not possible or minimal. For example, "marking" tokens is the best tool for identifying chains of actions! And the option with blocking tokens is a fight against "conspirators and Western agents"

But I don't think that China is a traditional economy or neither will J consider such fast rising economy competing with America and other global economy to be a traditional economy. China is basically trying to go out of the current wave of bitcoin adoption but rather want to push forward the yuan with the population that is a big factor and market advantage.

The former President of china's central bank, sounds much more credible than Jamie Dimon. Have to give him that.   

But isn't it interesting how his words return us to the big block debate? One might wonder if origins of the big block movement had connections to china. I think so far china is the only central bank to echo big block demographic ideology. Nigeria, venezuela and other nations have publicized other reasons for opposition to cryptocurrency adoption. There could be an interesting thread of deduction determining affiliation present.

The timeline for CBDCs could also be an interesting point of deduction. Many might agree central banks appear to be waiting for something, before unveiling and rolling out CBDC. It appears they could have a blueprint or roadmap in place.

Well, first of all... this is coming from a former president ...so he is not in the picture anymore... he is speculating just like any other normal citizen now. 

Secondly... What did they test, when they said... Bitcoin has scaling problems and high fees and transaction congestion and speed problems? Did they even consider Bitcoin with the Lightning Network... or did they just look at the original Bitcoin (BTC)?

The Lightning Network solved most of those problems ....and this is a much better option to use, when you use Bitcoin as a currency. 

The real reason - https://www.npr.org/2021/10/18/1046945534/chinas-economic-growth-weakens-amid-construction-slowdown

China's economy is becoming unstable and they're having trouble growing. If China's economy falls, that's going to send the global economy into the gutter for some period, who knows how long. This is as most economies are already trying to recover from Covid. Just a desperate and failing attempt at trying to regain control of the inevitable downfall of the Chinese economy.

Cryptocurrency will outperform their CBDC of course. Nothing like a currency that is not confiscatable by authorities. While they ban Bitcoin and all other crypto transactions, the rest of the world is adopting cryptocurrencies. Once they see it's not going to be to their advantage, they may change their stance about crypto and will welcome Bitcoin.

I heard they are going to make athletes use the CBDC this Beijing Olympics 2022 which is why some athletes are boycotting this Beijing Olympics 2022.

Ah, you beat me to it--I was going to say exactly what you said after reading the article.  Zhou isn't concerned with any functional problems of bitcoin or its utility as a currency.  Those statements are total BS, which is exactly what I'd expect from any politician in any country.  It really is amazing how consistent they are across the world with their double-speak, obfuscation, and straight-up lying.  You'd think cultural differences would have an effect on that, but they don't--people who achieve high political rank get there by the same means and have sociopathic personality traits that transcend borders and culture.

The ban on crypto is all about China's control over its citizens' freedom to do what they want with their money, and it's the same reason any government regulates crypto to the point of uselessness.  I'd like to think something like this wouldn't happen in my country, but I'm not naive enough to think that it couldn't.

This is not about crypto crackdown but a way to promote their centralized coin, digital Yuan.

I also agree with this,but is Bitcoin an actual currency?
If you ask me,Bitcoin is more like a financial asset,whose main goal is the store of value.Bitcoin isn't convenient as a medium of exchange because of the volatile price and the slower and more expensive transactions,which occur every time the blockchain gets stuck with multiple transactions.
There's also a thing called the "Gresham's law" in which bad money (fiat) drives good money (Bitcoin) out of circulation,so the people prefer to use bad money (fiat) in their daily life,while keeping the good money(Bitcoin) as a store of value.
CBDC is going to be another form of fiat money/"bad money".

Well, it is true that Bitcoin is a bundle of both advantages and disadvantages at this point, but I don't think the reasons he stated were enough to actually warrant the banning of crypto in general. Though I guess the fact that it poses enough threat to actually damage their creation of CBDC's. I guess them banning crypto is actually acknowledgment in of itself of how crypto is actually helpful and useful for us users, but not for them who are the ones responsible for controlling the economy.

Banning something because apparently they think it's going to outperform the CBDC. Sounds legit! Apparently Bitcoin and cryptocurrencies are so substandard that they need to ban it like every month.

What the man is saying is true. I agree that a currency should function well as payment first and foremost. And while there are advantages in using Bitcoin, there are also reasons why it remains to be not the most convenient payment method.

However, I think Zhou did not mention the one biggest reason why Bitcoin, or other independent cryptocurrencies for that matter, will never be adopted as a currency of his country. The main reason, which should sufficiently stand alone, is actually that China will never give up control over money. Using Bitcoin or other independent cryptocurrencies means losing that control.

If China had invented a better product they wouldn't require to ban the opposition.  The actions of the communist military backed party is not towards free enterprise and the discovery of the best product for the people and country, it will be for the result of favoring the largest entities in the country who in turn support the party.
   It is far easier to operate a centralized system over a self confirming decentralized system, we have known this some time and if its not decentralized its not crypto.  A really simple rule to remember, China will operate a digital currency system but I already have that in 99% of FIAT being digital clearance.

The former president of the People's Bank of China shared his view on CBDCs and their part in the modern economy, additionally commenting on the real reason behind the crypto crackdown in the country.
He believes that while other countries use different ways of implementing digital currencies in their economic systems, China will find and use the best possible way.

As Zhou Xiaochuan stated, the most basic function of currency is as payment; otherwise, it is inherently useless in the traditional economic system. While the currency may have a storage function, it must be useful for payments.
With the introduction of CBDCs, the economy will reap numerous advantages like reduced costs, higher convenience and stability. They are more convenient and offer more flexibility than traditional payment methods. Businesses will also benefit from the digitalization of the economy. Small enterprises will be able to create a more effective and easier accounting framework.
Referring to the most recent actions coming from the Chinese government toward traditional cryptocurrencies and mining, Zhou said that it is the "survival of the fittest" since the decentralized blockchain-based digital currency is not the most convenient payment method for traditional economies.
Most likely, the former president of the Central Bank of China referred to problems that modern cryptocurrencies have with the scaling that includes fees, network congestion and the speed of transactions.


Source: https://u.today/chinas-central-banks-former-president-introduces-reason-behind-countrys-crypto-crackdown