Bitcoin is unstoppable – as China proves
Bitcoin has once again proven that it is an unstoppable force in the global financial system – and what is surprising is that it has done so in China.
Blockchain analytics firm Chainalysis has released its 2022 Global Cryptocurrency Adoption Index detailing the world adoption of Bitcoin and other digital currencies.
Emerging markets dominate the adoption index. The World Bank divides countries into four categories based on income level and general economic development: high income, upper middle income, lower middle income and low income. Using that framework, we find that the middle two categories dominate the top of the index.
Of the report’s top 20 ranked countries, 10 have lower middle incomes: Vietnam, the Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya and Indonesia.
Eight are upper middle income: Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia and Ecuador.
And two have high incomes: the United States and the United Kingdom.
The report’s most interesting finding is arguably that, despite last year’s ban, China has returned to rank among the top 10 countries in the world for adoption.
It was last September when the country’s central bank announced that all cryptocurrency transactions are illegal, effectively banning digital tokens like Bitcoin. It was Beijing’s seventh attempt to crack down on the internationally booming sector.
It was the clearest indication yet that China wanted to shut down cryptocurrency trading in all its forms. A statement made it clear that those involved in “illegal economic activities” are committing a crime and will be prosecuted.
This is why China re-entering the top 10 of the index this year after being number 13 in 2021 is critical.
It suggests that the ban has either been ineffective and/or poorly enforced.
It highlights Bitcoin’s fundamental qualities: the inherent value of digital, borderless, global, tamper-proof, non-confiscatable currencies.
It will also serve as a wake-up call to other central banks and governments who believe they can ban digital currencies in an increasingly technology-driven world.
More regulation of this sector is undoubtedly on the way, and this is a good thing that I have long championed.
But it remains clear that if authoritarian Beijing has failed to stop Bitcoin – even in the current prolonged bear market – it will be next to impossible elsewhere.
In fact, as I’ve said before, I expect that more nations will inevitably adopt Bitcoin as legal tender.
These will naturally be more likely to be emerging markets, because cryptocurrency provides concrete benefits to people living in unstable economic conditions.
It seems to me, and others, that China’s Bitcoin ban may have spectacularly backfired on Beijing and perhaps further strengthened the case for digital assets.
Nigel Green is the founder and CEO of deVere. Follow him on Twitter @nigeljgreen.
