On Sep. 24, China’s central bank officially banned all transactions relating to cryptocurrencies, including those involving Bitcoin and Ethereum.
This ban comes months after China’s central bank announced the creation of their own form of digital currency, known as the digital yuan. This new form of currency was meant to negate one of the major benefits that proponents of cryptocurrency cite: anonymity.
“In order to protect our currency sovereignty and legal currency status, we have to plan ahead,” said Mu Changchun, head of the digital currency project, in an interview with The Wall Street Journal.
While there has yet to be any information correlating the decision to ban cryptocurrency with the recent development of their own digital yuan, many speculate the decision was made to ensure Chinese citizens adopt the digital currency developed by the People’s Bank of China in order to provide the necessary tools for the government to monitor its economy and its people.
China has been busy cracking down, not just on cryptocurrency, but on domestic big tech companies as well.
In February, China’s market regulator released new anti-monopoly guidelines targeting internet platforms and further tightening existing restrictions against the country’s tech platforms.
In August, they introduced a major data protection law requiring data collectors to get user consent before collecting data, and allowing users to withdraw their consent at any time. This law also tightly regulates how data relating to Chinese citizens may be used outside the country.
What this means for consumers and companies both in China and abroad, however, may be slightly more nuanced. These regulations have put significant hurdles on the tech companies operating within the country, leading to billions being wiped off of Chinese tech stocks. Regulators of the new laws also launched an antitrust investigation into Alibaba, a tech conglomerate similar to that of Alphabet, Inc.
The data protection law may not necessarily have a negative impact for consumers of Chinese platforms, but rather provide a foundation for greater digital autonomy. The European Union has a similar institution that creates a privacy framework, the General Data Protection Regulation.
The data protection regulations gaining momentum around the world stand in stark contrast to what’s been occurring in the United States, especially in the wake of the recent ruling in Epic Games v. Apple. The U.S. continues to maintain a laissez-faire approach to digital privacy and data regulation amongst our own domestic tech giants, where the ways companies charge consumers take precedence over how companies use the data they collect.
China’s regulations may force U.S. tech companies to adjust the ways in which they’re able to provide their products online, putting traditional business models of data collection and ad targeting in jeopardy. Such a phenomenon may very well lay a foundation for the U.S. to adopt similar strategies against non-consensual digital surveillance.
It should be noted that these rules and regulations do not prohibit the People’s Republic of China as an institution from performing surveillance, but rather centralize it. China still requires companies to provide access to their companies’ systems upon request from the government. While the U.S. has its own dark history of surveillance, companies aren’t required to unlock their devices for use as evidence, nor are they required to allow government access to devices or services in most cases (although that doesn’t mean they won’t).
These adjustments to China’s tech industries and digital currencies mark a major shift in the largely unregulated industry across the globe, and these effects can impact not only consumers in China, but also those in the United States. New U.S. tech laws could very well be informed by those of other countries like China.
