Chinese lawmakers have gone a step further in trying to ensure that cryptocurrencies are stamped out once and for all in the country. Those found guilty of raising funds for crypto projects can now face more than ten years in prison.
The Chinese population of nearly 1.5 billion is being strapped into a financial straitjacket that government authorities are looking to make totally and completely secure.
Over the last several years there were announcements of bans on cryptocurrency in mainland China. This came to a head last year when first bitcoin mining was outlawed, followed by a complete ban on any individual or company from transacting in cryptocurrencies.
However, up to now, courts have lacked a proper legal framework for dealing with transgressors. With Thursday’s announcement, it appears that the risks for having any kind of dealings in crypto in Chinese jurisdictions have now become incredibly serious.
In an article on Bloomberg, Winston Ma, adjunct professor of the law school at New York University was quoted as saying:
“This is the first Supreme Court legislative interpretation to officially have cryptocurrency transactions covered under the Criminal Law,”
The Chinese authority’s eradication of cryptocurrencies no doubt owes much to the country’s efforts to propagate its own digital yuan, which is a central bank digital currency that will give government control over citizens that is unparalleled in Chinese history.
The Chinese government favours the social credit system, which rewards and punishes individuals or companies based on what the system considers their ‘trustworthiness’. Bad scores can result in infractions such as inability to travel, reduced employment prospects, and public shaming, among others.
Therefore, the amount of control that a central bank digital currency (CBDC) would bring to the Chinese government, would tie in well with being able to punish those who don’t toe the line, by being able to freeze their bank account, or even turn them off from the financial system altogether.
What cryptocurrencies gave to Chinese citizens, and many citizens will probably still hold them, was a way of protecting their financial sovereignty.
Crypto is an asset that is outside of government control. As long as it is held in a wallet where the owner holds the private keys, it is completely inaccessible to any individual or government organisation.
Along the same lines, a very important lesson will have been learnt by citizens of Canada, when the government unexpectedly froze the bank accounts of protesting truckers, along with anyone it could prove to have helped by sending funds.
It appears that even in the west governments can overreach themselves by interfering with their citizen’s finances. Cryptocurrencies have been maligned and scorned by leading members of governments and banks ever since the realisation dawned on them that the hereto ‘laughable’ cryptocurrencies were actually growing in popularity, and were becoming a serious competitive threat.
Anyone that knows just how perilously close the fiat monetary system is to failing, and also the kind of effect CBDCs will have on citizens, should think about getting some of their wealth into bitcoin and crypto. End times are upon us.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
