China’s central financial institution, the People’s Bank of China (PBoC), recently announced that the Chinese yuan (CNY) is now used in less than one percent of the world’s total Bitcoin (BTC) trading. According to CryptoCompare data in September 2017, CNY BTC trading accounted for over 90 percent of global bitcoin trades. In order to reduce the number of bitcoin transactions involving the Renminbi, the Chinese government moved toward banning cryptocurrency purchases using fiat currencies.

CryptoCompare BTC CNY Bitcoin TradingSource: CryptoCompare

Moreover, authorities in China placed travel restrictions on employees of crypto exchange Huobi and OKCoin. Both these exchanges had one of the highest crypto trading volumes in China at the time. Additionally, 85 initial coin offerings (ICOs) and 88 local cryptocurrency exchanges, which constituted the majority of China’s crypto economy, have now shut down. Due to the government-imposed restrictions, Huobi shifted its operations to Singapore, a country offering a more favourable crypto environment.

Meanwhile, OKCoin, now known as OKEx, has moved its headquarters from China to crypto-friendly Malta. Cryptocurrency exchange Binance, whose Q1 2018 profits exceeded that of Deutsche bank, Germany’s largest financial institution, also shifted its operations from mainland China to Malta due to regulatory pressure.

$1 Billion In Chinese ICO Investments Returned To Investors

During its nation-wide crypto crackdown, the Chinese government labeled ICOs as an “illegal public financ[ing]” method. ICOs were accused by the country’s authorities of aiding in money laundering and other types of illicit activities, including the issuance of fraudulent and illegal securities. According to a September 22nd, 2017 report by Xinhua news, approximately $1 billion worth of investments in 43 different ICO projects were given back to investors after a government-led crackdown on local crypto-related startups.

Chinese authorities widened the scope of their cryptocurrency ban in February by prohibiting the nation’s residents from trading and acquiring digital currencies through exchanges located in countries outside of China. The heavy restrictions placed by the Chinese government have also led to giant cryptocurrency mining company Bitmain shifting its headquarters from mainland China to Singapore. Bitmain has now established its mining operations in the United States and Canada as well.

Although China’s government has been critical of cryptocurrencies, it has praised and adopted blockchain technology in a number of its routine operations. For instance, the Chinese government’s National Audit Office is reportedly planning to implement a blockchain-based solution for its existing data infrastructure. Billionaire Jack Ma, founder of giant online retail company Alibaba, has also been a strong supporter of blockchain technology, while referring to Bitcoin and other cryptocurrencies as merely a “bubble.” Notably, Ma’s Ant Financial company introduced a blockchain-powered money transfer service on Monday, which is now sending digital payments from Hong Kong to the Philippines.