Is China’s Bitcoin Ban Bullish for DeFi?

By Aleksandra Wilson
3 min read October 19, 2021

Although the ban in China is not entirely new to crypto users, it had a few updates that made it bullish for DeFi. The newly implemented rules make it all suitable for decentralized projects. Therefore it creates a tendency that we could call bullish for DeFi in general. Just a few weeks ago, China banned BTC altogether, or at least that’s the approach that many news outlets reported. In simple terms, the Chinese government declared  all transactions involving crypto illegal. It’s understandable that it’s not easy for the general public to grasp the whole concept of what China has done. Every time the country announces new guidelines, it wreaks havoc in the crypto space, thus wildly shaking the price of Bitcoin, among others.

Consequences For Other Sectors 

The other bans that China has implemented this year have brought consequences for various industries. Not only has the Chinese crypto industry suffered. Besides the miners who had to leave the country this year, retail traders and investors got blocked in China. Some DeFi projects such as Debank and Loopring have stopped IP addresses in China from accessing them. Also, crypto groups on WeChat in the country are now moving to Discord or Telegram. 

The Analysis About This Ban Being Bullish for DeFi

In theory, this last ban imposed by the Red Dragon is not so different from the previous ones announced. The main difference is that they’re making it very clear that it will be enforced more rigidly this time. This approach is due to the amount of government departments involved in the matter, it will all become more strict. The crypto community in China, including protocols of Decentralized Finance, is trying to approach the subject safely. They have already started blocking Chinese users due to the risk of getting investigated. There has been a minimal impact in the crypto community in a broader range since the ban back in May had already shaken the market. 

At the moment, crypto builders that are still in China have to remain entirely in anonymity. It is a challenging task to accomplish, full of risks and unfortunately not entirely possible every time. They must adjust the structure of their organization, the marketing strategy, and the way the expectations of their projects are met. 

In confidence, some DeFi founders said they are gradually closing business in China since most of their users are international. Now, it’s become clear that the old golden days when the empires were built by feeding the massive demand of crypto in China are over. The last ban is definitely a catalyst to the decentralization of crypto. It can be considered bullish for DeFi and also for the mindset that many in the crypto community are used to having. It will be interesting to witness how all of this will unfold, afterall, there are no boring days in crypto space.

Load more sync