Christopher wood, the global head of equity strategy at Jefferies, opined the China’s Crackdown as its strategy towards China’s authoritarian model.
According to him, since the Chinese officials want no completion for its digital renminbi, they enforced the crackdown to bitcoin and other cryptocurrency in their country.
In his opinion, they actually do not care about CO2 emissions and the environment that they claimed as the reason for the imposed ban. All they are aiming for its to neutralized the competition to its digital yuan:
“Certainly, the decentralized aspects of blockchain technology, which is so appealing to libertarians opposed to fiat currencies as state monopolies, is the complete antithesis of China’s collectivist system.”
The People’s Republic of China clearly understands this. This is certainly a far more important issue to Beijing than the carbon generating aspects of bitcoin mining.”
Wood made a prediction that the China is soon to launch its CBDC and also made an expectation that it would happen around the end of 2021.
“Certainly, the decentralized aspect of blockchain technology, which is so appealing to libertarians opposed to fiat currencies as state monopolies, is the complete antithesis of China’s collectivist system”.
“The People’s Republic of China clearly understands this. This is certainly a far more important issue to Beijing than the carbon generating aspects of bitcoin mining,” Wood wrote.
In western counties however, we will not be noted such bans as they are far more flexible and accommodative towards cryptocurrency, said Wood on comparing China with the US.
The financial Stability and Development Committee of the State Council of China reiterated the ban of Bitcoin mining and trading in late May. As per the local journalist, “this is the first time that the highest level of the Chinese Government has clearly proposed a blow to the mining industry.”
The effect of this announcement is that the bitcoin’s dollar value plummeted by nearly $5,000 in just one hour.
Significant blow to the digital asset was when the Agricultural Bank of China announced a ban on crypto usage.
The digital asset was trading at $34, 950, up 5.5% at around 2.30pm IST, as per CoinGecko.
