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Chinese arrest 1,100 people in crackdown
Reports are emerging from China that the government has had enough. The Department of Public Safety said 1,100 people suspected of using cryptocurrencies to launder the proceeds of various internet and telephone scams have been arrested.
The move follows a ban last month on several groups promoting cryptocurrency exchange, trade and mining. The use of foreign currency at illegal gambling sites has been of particular concern to the authorities.
Typically, money launderers charge fraudsters between one and five percent to convert proceeds into cryptocurrencies. However, blockchain technology in the crypto world makes it difficult for governments to track beneficiaries of money laundering.
The Chinese government has sought to reposition the renminbi as a currency for international trade in recent years. But cryptocurrencies are a major drag on Chinese ambitions to replace the USD in the longer term. For the Chinese government, anything that hinders its political goals is unwelcome.
The US government has launched several attempts to soften the appeal of currencies, including former US Treasury Secretary Steve Mnuchin’s attempt to pass crypto wallet regulations. This move was hampered by a reluctant legislature and bad timing ahead of the 2020 presidential election. However, there is no doubt that the portability and anonymity of cryptos is creating a troubling sentiment among regulators and bureaucracies eager to follow. and tax the flow of capital between jurisdictions.
Currently, several unique characteristics of cryptocurrencies act as a brake on their wider acceptance. Crypto transaction processing time, compared to other payment technologies, is painfully slow. Bitcoin processes three to seven transactions per second, compared to 24,000 through Visa. During peak times, costs of execution through Bitcoin can climb up to $ 25, which is uncompetitive for small transactions.
There is currently no evidence of a move to the crypto ban. The most obvious way to shut down the ecosystem would be to make it illegal to own a crypto wallet. Like other products that have become banned over the years (for example, alcohol and drugs), the problem is that crypto may have grown too big to fail and too lucrative not to go and go. tax.
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