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China Corners Crypto

Posted January 04, 2023

Matt Insley

By Matt Insley

China Corners Crypto

Nobody has opposed crypto technology more than the Chinese government.

Well, that’s not entirely true…

Nobody has opposed crypto technology that they don’t control more than China.

China’s first crypto “ban” came all the way back in 2013, when they prohibited banks from making crypto transactions.

In 2019 they turned their attention specifically to Bitcoin, attempting to ban private mining of coins, deeming it an “undesirable practice”. The ban eventually went through in 2021.

They took it a step further by banning crypto trading altogether later in the year.

All of these “anti crypto” movements were made parallel to China developing its own central bank digital currency (CBDC). In fact, they’re on track to be the first major world economy to shift to a digital dollar.

You see China isn’t anti crypto, they’re anti your crypto.

They have identified a powerful and world-changing technology, and they want to be in control of it.

They’re Not NFTs, Dad!

Since controlling currency itself wasn’t enough, China has now set its sights on controlling digital marketplaces themselves. 

NFTs have managed to exist within a blindspot of China’s regulatory overreach.

But, of course, that’s about to change.

First of all, don’t call them NFTs. They’re digital collectibles.

The emphatic insistence of rebranding by Chinese conglomerates Ant Group and Tencent seems to be a universal move - being mirrored by the likes of both Reddit and Donald Trump. It makes sense considering the stigma NFTs received following their prodigious rise-and-fall in May of 2022.

The rebrand however makes for an easier target for regulation, which China is ready to pounce on.

Bigger Than You Think

Despite strict regulation on crypto, NFTs (sorry, digital collectibles) have been a booming business in China.

In April of 2021, Beijing hosted what many deemed “the first major crypto art exhibit”, with digital art being displayed on television screens at an art gallery in the city’s trendiest art district. After a successful launch, the exhibit had its run extended in Shanghai.

With the crypto regulation crackdown coming a month later, the digital art world was mostly spared. China continued to be a hub for digital collectible creators and collectors.

While NFT enthusiasm has floundered through most of the West, they have maintained their popularity in China in a big way. Albeit on heavily regulated blockchains and not being bought or sold using cryptocurrencies.

The Crackdown

Fast forward to today, and China is once again taking strides to corner popular markets that “can’t be trusted” in the hands of the public.

The “China Digital Asset Trading Platform” was launched as China’s first national NFT marketplace.

The trading of not only digital collectibles, but also digital copyrights and property rights, will now be traded on a state-run blockchain called the “China Cultural Protection Chain”.

I’m sure the upcoming government monitored art movement will be very subversive and culturally impactful thanks to its “cultural protection”...

Central Bank Digital…Everything

The concerns surrounding CBDC’s have been thoroughly documented here at Paradigm Press. A digital dollar that is issued and controlled by your government has widespread and terrifying implications.

Privacy is a thing of the past, as every one of your transactions will be logged on the state’s ledger.

When your money is sitting on the government’s own blockchain, they can go ahead and “save you the trouble” of filing your taxes and take it out for you. Hell, it’s in their bank already.

These situations are among the many concerning possibilities that will exist with central bank digital currencies.

The “China Digital Asset Trading Platform” is an expansion of the CBDC, in which everything exists not only under the government’s watchful eye, but within its own books.

Art will now effectively be drawn on the pages of the People’s Republic of China’s official ledger. A nation that has aggressively stifled descent is now in control of free expression through digital art.

The inclusion of proofs of ownership means that property itself, both physical and intellectual, are now subject to government review and under government control.

While we’d hope that other nations wouldn’t be following China’s example with digital marketplaces, the road that they’re paving with CBDCs is currently being driven by over 100 countries worldwide.

Crypto technology sure is booming, but not quite with its original set of Libertarian hopes and dreams…

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