It’s hard not to think of Charlie Brown, Lucy, and football as they play the cryptocurrency game in China.
The “Peanuts” cartoon by Charles Schultz says more about the herding behavior of crypto enthusiasts than meets the eye. Every time, Lucy convinces Charlie she’ll catch the ball kicking for her. Each time, he yanks it away at the last second, with Charlie landing flat on his back considering its gullibility. Bullish momentum on bitcoin and its peers often looks that way.
China, of course, Lucy is here. In recent years, no country was more excited about crypto assets—both mining and trading—than China, where the first wave of significant exchanges popped up. Time and time again, however, President Xi Jinping’s regulators have brushed off the market’s growth and potential—often abruptly.
Now it looks like Xi’s team wants to hide the ball for good. After banning mining and trading, it is going after fintech and retail giants that can give crypto holders the impression that they can actually do something with their assets.
The People’s Bank of China is rolling out its digital currency in the months ahead. Meanwhile, it is ordering Ant Group and four giant state-owned banks to crack down on transactions in privately held digital assets. While Beijing is calling on the Agricultural Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China and the Postal Savings Bank of China to sever ties with crypto assets, the market is facing a period of existential soul searching.
What is clear of China’s move against the crypto world. Why, less so? It is not difficult to see it as prosperous striking back the financial empire that supports and communist party. And repositioning itself in a bad way to guide reforms in Asia’s largest economy.