LONDON (Bywire News) - The stellar growth of cryptocurrencies over the last few years has caught many people in the market on the hop. Regulators have struggled to come up with approaches which protect the interests of investors while also nurturing innovation. China is no different and conflicting statements from authorities suggest they are still struggling to decide how they should approach the market.
First, a senior official from the Ministry of Public Security warned that more than RMB I trillion ($145.5 billion) flows out of China annually thanks to illicit gambling operations which are prohibited in China.
According to Liao Jimrong, Director General of the Ministry’s International Cooperation Department, law enforcers struggle to keep track of cryptocurrency flows which could undermine China’s economic security should these illicit gambling operations decide to collude with malicious ‘foreign powers’.
However, if you were to take a look at State-owned TV, you’d have heard that cryptocurrencies are the best performing assets of the year. The top-performing tokens have so far gained 70% in value over the course of the year.
By contrast gold, ever the safe haven during times of economic strife has managed a more modest 20%.
While such reports come with the usual caveats warning investors not to get too carried away people can be forgiven for wondering where the government stands on cryptocurrencies. However, one thing which does seem to be out is over the counter trading in Crypto with the People’s Bank of China blacklisting several OTC traders.
Meanwhile, in Russia, the Chinese crypto exchange Balance has been blacklisted for disseminating information about trading in Bitcoin. However, two days later Huobi announced it was launching a crypto trading app in Russia which would allow people to trade Bitcoin.
The situation, therefore, is anything but clear. The Chinese, like many countries, appears to have a love-hate relationship with cryptocurrencies. They are intrigued by the opportunities but fearful of the risks. Authorities, meanwhile, worry about tracing where these funds are flowing and how they are being used.
(Written by Tom Cropper, Edited by Klaudia Fior)