In September 2021, the government of the People’s Republic of China declared cryptocurrency illegal. This move was not an unexpected one — after all, China banned the mining of crypto back in the spring of the same year — but it is significant. The Asian nation is home to over 1.3 billion people and has become renowned as one of the leading adopters of innovative fintech products and e-payment methods, such as the domestically developed Alipay and WeChat pay. In other words, China’s support means a great deal to the global community of cryptocurrency users and providers.
While China has banned crypto and reversed these bans before, this change in regulation feels more pertinent. Restricting crypto when the currency system is still in its infancy is one thing. But crypto has evolved greatly over the last decade and is now entering the mainstream consciousness in a big way. Rather than simply being a vehicle for speculative investment, it is increasingly becoming a viable competitor to more established currency structures.
So what does this mean for gaming? What impact will China’s reversal have on crypto in gambling?
The Impact of China’s Decision
On the face of it, it doesn’t mean too much at all. Gambling and betting — in almost all their forms — are already illegal in the People’s Republic of China. While China technically includes territories in which betting is legal, such as Macau, these are special autonomous zones. And the impact of Beijing’s actions will not be extended to these territories. This means, while China is home to a huge potential market for gambling service providers, this market was already off-limits due to domestic legislation.
There could, however, be broader ramifications. These may stem from the stability and viability of cryptos — something that could have a knock-on effect in betting. It is difficult to find exact figures for the total amount of cryptocurrency users in the Asian nation. But the number is likely to be large given the amount of private investment in crypto within the country. By late September, Chinese crypto firms such as HuoBi Tech and Okcoin had already experienced plummeting share values, falling 23% and 12%, respectively. Such movements are likely to make digital currency markets even more volatile.
A Longer-Term View
While increased volatility might make gambling providers reluctant to accept and trade in cryptocurrency, it is not a dead-end. Let’s not forget that these markets have always been volatile and that this attribute has only added to the attractiveness of crypto investment.
While crypto will need to become more stable, the banning of the currency structure in the world’s most populous nation is likely to be a temporary blip — albeit a significant one. It is not game over yet for the likes of Bitcoin, Ethereum, and Dogecoin.