In the past several years, Bitcoin has been subjected to ever-stricter restrictions by Chinese authorities, with the most recent crackdown occurring in May of this year. Our research serves to sketch a precise timeline of China’s actions against Bitcoin, determine the incentives of the Chinese government in taking such a hard line against Bitcoin, but not going as far as outright banning its citizens from holding the coin, and suggest what the future may hold for Bitcoin in the People’s Republic. We find that the current measures taken against Bitcoin mining and trading in China are part of a top-down process that can be traced back as far as 2013, and that China has three major incentives in taking a hawkish stance against Bitcoin: preserving stability in its financial system and combating rampant financial crime, deepening China’s grip on data as part of its ambitions to create a surveillance state, and curbing rampant electricity use in order to meet its green goals to combat climate change. At the moment, the odds seem to be entirely stacked against Bitcoin in China, and the future of the virtual currency looks rather bleak. In the absence of major changes to the incentives of the Chinese government, we can expect to see further punitive measures taken against Bitcoin in the country on a path to an eventual categorical ban when circumstances are determined opportune.
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