China Banning Open Finance Is a Big Mistake

Why China is shooting itself in the foot with their recent Bitcoin mining crack down

Jun 25, 2021

Hey DEFI TIMES community,

China is cracking down on Bitcoin mining again - for me, this doesn’t come as a surprise at all. China has been trying to ban cryptocurrencies for several years now.

Just recently, China’s Central Bank announced that Chinese payment institutions should prevent crypto transactions.

Five major banks in China are affected:

Alipay
the Agricultural Bank of China
the China Construction Bank
the Postal Savings Bank of China
and the Industrial Bank

However, one thing is particularly sad here: China doesn’t only crack down on Fiat-to-crypto transactions, it’s also trying to ban Bitcoin mining.

Banning Bitcoin mining is like banning the open internet. North Korea made the mistake early on and failed miserably - open systems beat closed systems.

What China is missing here is that it’s not possible to ban Bitcoin in general. You can only ban yourself out of Bitcoin.

China might ban Bitcoin mining, but miners will just move elsewhere! Innovation will happen nonetheless - but apparently not in China.

Probably the biggest winner is the US: What China is missing out on, the US is gaining.

The Bitcoin network will continue to produce block after block. Each block reward will either go to Chinese miners or it will go somewhere else. If China decides to ban itself out of Bitcoin, it will miss out horribly in the long run.

While China is losing, the United States is gaining Bitcoin mining market share.

China is shooting itself in the foot!

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DISCLAIMER: All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.

Do your own research before you purchase cryptocurrencies. Any cryptocurrency can go down in value. Holding cryptocurrencies is risky.

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