Why China absolutely cannot allow the free trading of cryptocurrency

China, since last October, has been busy shutting down any kind of cryptocurrency trading activity within its borders. On the surface, they say its because they don’t want people to get defrauded of their money, but a deeper look at how the economy in China runs will reveal the real reason, which is much more serious, of why China can never allow free cryptocurency trading in its country.
China’s currency is a closed currency, which means, unlike the USD, you cannot exchange large amounts of it freely for other currency. That is how the government keeps a stable price for its currency. It doesn’t matter that much how much the government prints because as long as it controls the trade value and shuts off doors for people trading the Yuan for foreign currency, it can control the price and prevent hyperinflation from happening.
The truth is that although China has purchased lots of USD in its reserve, it does not nearly have enough to back up the amount of Yuan it has printed and people with large amounts of Yuan would jump at trading Yuan for USD if they were allowed to do so freely. The oversupply of Yuan would quickly cause the money to lose value and collapse the economy. This in turn, would make the CCP lose legitimacy and drive them out of power, which they cannot allow to happen.
Cryptocurrencies such as Bitcoin, therefore, are a real danger to the power of the CCP because they provide an easy and anonymous way for Chinese people to buy cryptocurrency with Yuan, then move it to another exchange and exchange it for USD, thereby circumventing the protectionist mechanism that the government has in place to prevent mass trading of Yuan for USD or other foreign currency. This they absolutely cannot allow and will do anything to stop. Because of this, China will never allow the legal trading of cryptocurrency within its borders. Its a matter of survival and keeping power for the the communist party.

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