Bitcoin: China Is Cracking Down On Digital Currency

Bitcoin rises above $40,000 - Vanguard News

Making bitcoin millionaires is a common theme on TikTok, an app developed by Beijing-based ByteDance. In video after video, young influencers show off their crypto-funded lifestyles.

But opening ByteDance’s Chinese sister app, Douyin, is a different story. While looking for Bitebi (Chinese for bitcoin), the platform shows me negative videos.

For example, in the first image, racks of whirring bitcoin-mining computers consume more power than 100 countries. “Why don’t we just play with a bunch of air instead? Buy mine, I’ll buy yours.

Which app is better? It’s not that Chinese youth are unlike their foreign counterparts. To comply with the government’s priorities, ByteDance must censor its sites. Increasingly, that means closely monitoring bitcoin-related content. Cryptocurrency transactions were made illegal by the People’s Bank of China and nine other agencies last month. Major cryptocurrency exchanges cut ties with Chinese users. This was part of a year-long campaign by Chinese authorities to shut down bitcoin mining farms.

It is a significant U-turn for a country that accounted for 90% of global bitcoin trade five years ago. According to data provider Chainalysis, China’s digital wallets received $150 billion in cryptocurrency in the first half of the year, almost half of the world’s bitcoin.

The Chinese crackdown pits an authoritarian government’s unlimited power against a key selling point of cryptocurrencies: that their decentralised networks of computers make them immune to central control.

Chinese citizens can now transfer up to $50,000 per year using bitcoin, according to Beijing. Even at home, it allows ordinary people to transfer funds or invest without government oversight. Buying a coffee in Beijing with bitcoin used to be possible.

Banned Cryptocurrency Exhanged

When Beijing banned cryptocurrency exchanges in 2017, the online trading hubs fled overseas. Using a few extra steps, Chinese users could continue buying and selling bitcoin. The new rules have prompted websites and apps to take action to exclude Chinese users.

Fearing retaliation against their Chinese employees, offshore exchanges have begun rejecting Chinese clients. Several cryptocurrency digital wallets are disconnecting mainland users. Douyin is one of many Chinese media platforms now filtering information about cryptocurrencies. An “upgrade” to another popular site, ChainNode, will change its focus. Posts about cryptocurrencies, such as a list of Beijing businesses accepting bitcoin, have vanished.

In any case, the deleted content seemed dated. The top of the list was a Beijing coffee shop famous for accepting bitcoin. But a barista said customers couldn’t pay with it for several years. “You can’t even discuss it,” he says. “We used to hold bitcoin events, but the government stopped us.”

While Chinese users can still send to each other, proving their faith in the distributed network of computers that keeps the currency, the bigger question is whether they will bother. Ideas that don’t fit Beijing’s narrative are effectively marginalized.

Conversely, online influencers on Douyin have a much more positive outlook on the new digital renminbi, which will give authorities unprecedented transaction tracking capabilities.

A Chinese official tells me that China no longer needs bitcoin. We now have our digital currency.

Beijing vs bitcoin: why China is cracking down on crypto | Financial Times (ft.com)

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