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Is cryptocurrency hard to kill in China

Is cryptocurrency hard to kill in China

Despite China’s continuous efforts to crack down cryptocurrencies, investors may, however, continue to find other ways to invest and trade bitcoin, Keith Pogson, Ernst & Young’s senior partner for financial services told Citywire Asia.

Pogson’s comments come after the Chinese central bank this week proposed to completely block access for mainland investors to trade virtual currencies on foreign online platforms, using the virtual private networks (VPN).

Colin Liang, portfolio manager at NN Investment Partners said mainland investors’ trading behaviour on foreign cryptocurrency platforms through VPN is seen as regulatory arbitrage.

‘This is a loophole, because investors will always have the access even when they sit in China, they still have the access to bypass [government-imposed] firewalls to get to these platforms. Now the government wants to close it,’ Liang, who runs the Greater China Equity fund said.

Last September, the People’s Bank of China banned the practice of raising funds by launching token-based digital currencies, known as initial coin offerings (ICOs) and ordered to shut down cryptocurrency exchanges.

In January, the PBoC outlined plans to limit power supply for some bitcoin miners as part of Beijing’s continuous efforts to clamp down cryptocurrencies

Despite the heavy crackdown, eager Chinese investors are still buying ICOs and trading bitcoin.

‘The Chinese authorities are clearly signalling that they continue to wish to restrict access to alternative non-fiat currencies,’ Pogson said.

‘This follows previous attempts to ban trading onshore, but also recognises the more complex on-line world in which we live and they operate.

‘It is likely that we will see further withdrawals from [cryptocurrency] trading or at least the freezing of activity by some,’ he concluded.

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