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China’s ‘Whack a Mole’ Approach to Regulation Unlikely to Stop Crypto Train

CryptocurrencySep 24, 2021 05:02PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – Bitcoin fell Friday as China vowed to crackdown on cryptocurrency once again, but Beijing’s ‘whack-a-mole’ approach to crypto regulation is wearing thin and unlikely to severely dent broader demand just as Western adoption is on the up and up. 

BTC/USD fell 4% to 42,971, but recovered some losses after a dipping below $40,000.

China’s central bank deemed all digital currency activities illegal and vowed to crack down on the market. But that doesn’t imply that there will be “ban on holding positions in cryptocurrencies,” Seamus Donoghue, VP of Strategic Alliances at METACO told Investing.com in an interview on Friday. 

While China’s approach to cryptocurrency regulation “can have a good deal of success, it's a little bit of a whack a mole,” according to Donoghue.

“China's is going to be less relevant ... as the trend of Western adoption - given all the banks and other institutions building blockchain capabilities - is increasing dramatically and rapidly,” Donoghue  added, pointing to a similar change seen recently in the cryptocurrency mining sector.

A potential exodus of crypto investors in China had sent shockwaves throughout the industry, as investors fretted about a potential hit to demand, but Beijing’s sway over crypto’s markets in terms of adoption isn’t as significant as it once was. 

“Last year, China ranked fourth on our global adoption index while the U.S. ranked sixth. This year, the U.S. ranks eighth while China ranks 13, “ according to research published by Chainalysis.

China has suggested a clamp down on illegal activity is at the heart of its decision to step up regulation on cryptos. But Beijing’s regulatory efforts on crypto could form part of a strategy to lessen the competition amid plans to launch its very own digital currency.

“China's has been trialing and is in the process of launching their own digital currency,” Donoghue said. “That could be one of the reasons for them to focus on minimizing the potential penetration of virtual currencies.”

It wouldn’t be the first time that China has stepped up the regulatory heat on foreign tech - threatening to gain a foothold in its markets - to buy time for the launch of its own rival domestic firms.

Looking at China’s historical reaction to overseas tech, “they've banned Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL), WhatsApp … all to launch their own domestic versions,” Donoghue added. “Now, they're banning crypto to launch their own domestic digital currency.”

China’s ‘Whack a Mole’ Approach to Regulation Unlikely to Stop Crypto Train
 

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Comments (17)
Nick Fit
Nick Fit Sep 26, 2021 2:11AM ET
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Bye China, haha
Alan Rice
Alan Rice Sep 25, 2021 2:44PM ET
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China: Old and smart, KNOWS a mole when it smells one. ( Crypto: financial fraud.)
Maria Mendez
Maria Mendez Sep 25, 2021 2:11PM ET
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Hola
Weaver Forrest
Weaver Forrest Sep 25, 2021 1:15PM ET
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crypto is a fake asset it doesn't produce anything.
Millennial Metals
Millennial Metals Sep 25, 2021 1:01PM ET
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China literally owns the global economy. If they ban cryoto it is done for.
YC Teng
YC Teng Sep 25, 2021 3:35AM ET
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Crypto fans going to be adversely affected by China's determination to wipe out crypto. Have fun while this tulip mania last
Kevin Avila
Kevin Avila Sep 25, 2021 3:35AM ET
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Investing Man if you were an actual “investing man” you would know what hes saying and acknowledges this truth…
perplexed76 .
perplexed76 . Sep 25, 2021 12:14AM ET
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soon ignorant crypto gamblers will be lying in the abyss mumbling "lie! boring! 100,000 next month"
George Ferreira
George Ferreira Sep 24, 2021 9:44PM ET
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crypto is the CIA brain child. giving them access to billions of devices and user data. no wonder china doesn't want it. not to mention the encryption will take 50years to crack. and by the time that happens ☺️🤣.
Neurotoxin Pridebreaker
Neurotoxin Pridebreaker Sep 24, 2021 9:44PM ET
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Your tinfoil hat appears to be malfunctioning. Have you tried charging it in the microwave?
George Ferreira
George Ferreira Sep 24, 2021 9:44PM ET
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crypto is the CIA brain child. giving them access to billions of devices and user data. no wonder china doesn't want it. not to mention the encryption will take 50years to crack. and by the time that happens ☺️🤣.
Kelly Pham
Kelly Pham Sep 24, 2021 9:23PM ET
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No government as well as central bank wants crypto currencies which are not issued by them to exist and they will do whatever they can to sink those currencies.
Kevin Avila
Kevin Avila Sep 24, 2021 9:23PM ET
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100% agree. This first thing we did wrong was allow them to be tradable on NYSE… That alone allowed banks to sink it as they please.
Benjamin McIntire
Benjamin McIntire Sep 24, 2021 8:47PM ET
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Waste of energy.
Vladimir Stamenkovic
Vladimir Stamenkovic Sep 24, 2021 7:47PM ET
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How many times we have heard this? It's becoming boring...
Ama perby Louisa
Ama perby Louisa Sep 24, 2021 6:49PM ET
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is not good at all
Md Ashik
Md Ashik Sep 24, 2021 6:49PM ET
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01913431793
Prakash J Chaudhari
Prakash J Chaudhari Sep 24, 2021 5:33PM ET
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Golden opportunity for USA ! Golden opportunity for India !Golden opportunity for miners to mine at triple the rate !!
Eldrish eldoran
Eldrish eldoran Sep 24, 2021 5:31PM ET
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Norway is talking about banning crypto mining. And I'm sure Europe will do it as well. it's a known fact it uses a lot of electricity. and prices are too high
Klaus Weyers
Klaus Weyers Sep 24, 2021 5:29PM ET
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why are we still buying products from such an autocratic regime?
Todd Gray
Todd Gray Sep 24, 2021 5:29PM ET
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neoliberalism!
Dustin Sharpless
Bydesigne Sep 24, 2021 5:29PM ET
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Todd Gray I thought it was Nixon who pushed america to China?
Mart Mala
Mart Mala Sep 24, 2021 5:29PM ET
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the products are very cheap due to autocratic labor laws that support very low and sick labor rates
Josh Harvey
Josh Harvey Sep 24, 2021 5:19PM ET
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Fake news
 
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