BITCOIN PROTESTORS

Guest Written by Roger Huang

How many times can a country ban Bitcoin? China has undoubtedly tried to plumb the depths of that answer. The country, the central bank (the People's Bank of China), and its associated regulators were among the first to recognize how Bitcoin could threaten its economic model. With tight state controls that went all the way down to how much foreign currency people could exit the system with (USD 50,000 per person per year), China developed an early path towards a central bank digital currency (the e-CNY) coupled with restrictions on Bitcoin. It started as early as 2013 when the Chinese central bank announced that Chinese banks could not deal with Bitcoin. Eventually, throughout a series of years, it culminated in warnings in 2019, bans on initial coin offerings, and more.

It was in 2021 that China placed the strongest hammer any state had attempted thus far - getting law enforcement involved, imposing a ban on Bitcoin exchanges serving people living in China, and starting a province-by-province race for restrictions on Bitcoin mining. Yet the question of what it means to "ban" Bitcoin remains a live one. Even today, many Chinese people buy Bitcoin and Tether through over-the-counter trading desks. Miners are still located in China, and even those who left often contribute to the global hash rate that secures the Bitcoin network. Newspapers in Hong Kong now openly publish editorials criticizing the central bank digital currency e-CNY, which has seen stalling adoption, and wondering whether the restrictions placed on Bitcoin by the "central authorities" were a mistake.

Though Hong Kong has launched spot ETF offerings for Bitcoin, these instruments are forbidden to Mainland Chinese, carving a paradoxical yet fascinating carveout in the "One Country, Two Systems" dynamic that had persisted since the Handover in 1997 that marked the true end of the British Empire - and the unprecedented economic rise of China, soon augmented by integration into the global financial and fiat system with World Trade Organization ascension in 2001.  It is from these roots that the maturation of Bitcoin in China could happen - with waves of entrepreneurs joining a global movement in Bitcoin. After the 2019 anti-extradition protests and the shadow of Mainland China imposing its laws and political control on Hong Kong, this contrast has never been stronger, as Hong Kong hosts Asia's largest Bitcoin-oriented conference while those who reside in Mainland China are "forbidden" to buy Bitcoin from exchanges.

Many countries will undoubtedly learn both positive and negative lessons from China's experience trying to restrict Bitcoin. Yet, perhaps Bitcoiners can take heart from Bitcoin's resilience to its strongest attacker. Today, many mainland Chinese, despite restrictions, still buy Bitcoin, and some post on Nostr, a Bitcoin-related social network. Both are signs that Bitcoin can not be truly banned.