As in so many other countries, the leaders of China have been grappling with the way in which they intend to handle the issue of cryptocurrency. Recently, they made their opinions a bit more clear. In fact, Chinese regulators are honing in on offshore transactions that Chinese nationals have made in regards to crypto currency. Strict laws will be imposed, and those who do not follow the current guidelines will be punished by having their bank accounts frozen and perhaps even having some of their assets taken over.
In a global economy that has gone crazy for bitcoin and other cryptocurrencies, it’s not difficult to see that the actions of these regulators will have a huge impact upon the world economy at large. This, of course, is a far cry from where China one stood in relation to cryptocurrency. In fact, China was once a haven for cryptocurrencies. However, recent rules and regulations have been put into place, and those who have invested in crypto currency‘s are feeling the pain. Perhaps this is why so many offshore platforms were created in order to serve as a sort of loophole, allowing Chinese citizens to participate in the crypto craze. However, it is recently become obvious that authorities are aware of these loopholes and are taking major steps to ensure that they are closed up.
While the prices of cryptocurrencies have risen exponentially in the past several months, new investors and speculators are betting their money on further rises. Yet, another country is warning its citizens. According to Bloomberg, Bank of Indonesia has just issued a warning about owning and trading cryptocurrencies.
“Owning virtual currencies is very risky and inherently speculative,” claimed the central bank. It has also warned about a forming asset bubble and money laundering with digital tokens.
Other countries are cracking on digital currencies, too. China is looking to discourage digital currency mining, while South Korea’s central bank is prohibiting its employees from trading these assets.
While many think that digital currencies are the future, not every one is so sure. Not long ago, Warren Buffet has called bitcoin a bubble. The proponents of bitcoin, however, say it is of limited quantity as only 21 million bitcoins will be issued. But the critics reply it’s 21 million of “digital nothingness.”
Cryptocurrencies generally rely on the blockchain technology. This technology will be adopted for future financial transactions, and this can happen without bitcoin. What’s more, there are other technological forks such as Bitcoin Cash. And countless other cryptocurrencies coming to the market. Some of them are worthless. For example, a parody digital token, known as Dogecoin, hit a $2 billion valuation.
No wonder the governments and central banks are warning their citizens. But, the party goes as it’s 1999, the time of the Dot Com Bubble. Some even compare the current speculative mania to the Tulipmania of a few centuries ago.