A Regulatory Crackdown in China Has a Global Impact For years now, Chinese regulators have been threatening to shut down crypto. This week, however, they truly did issue a huge crackdown, banning Chinese people from mining or trading cryptocurrency. For many, it was a shock to the system. After all, China has been known to host some of the biggest mining operations in the world. These days, however, the conversation has been about many miners thinking about moving their mining operations to Texas. While the savvy operators in China knew that a crackdown was imminent and already pulled out their equipment, many crypto companies in China are currently scrambling to shut everything down. Also, crypto exchanges based in other countries have been cutting off Chinese citizens in order to comply with the new rules. Binance and Huobi are just two of the popular exchanges that have had to cut off transactions from China.
The More China Rejects Crypto, the More DeFi Rises Chinese regulators may be dismayed to discover that some of their actions seem to be having an adverse effect. With dYdX and UNI on an upswing, it is pretty obvious that investors are bullish about tokens and blockchain in general. Data seems to suggest that crypto holders are rearranging their holdings but definitely not getting rid of them for good. Decentralized exchanges (DEX) have provided a safe space for those who want to figure out what they are doing with their crypto amid this broad crackdown.
Is This the Perfect Use Case for DeFi? All along, crypto enthusiasts have been touting DeFi due to its ability to evade regulators and federal governments that are threatened by the existence of crypto for whatever reason. Now, it seems as if the Chinese ban is providing the perfect stress test. Those who want to hang onto their crypto have had an easy time doing so — even if they have to make alternative arrangements in the meantime.