The Asian Battle Against Cryptocurrencies Won’t Probably End in 2022

Throughout 2021 we have seen a series of crypto bans coming from Asian countries. Last year, some countries decided to adopt Bitcoin as legal digital currencies, while others chose to ban cryptocurrencies investments.

Worldwide decisions from policymakers have affected the price of leading cryptocurrencies. While it is difficult to predict what will happen in 2022, some trends already seem visible in many economies.

This article will summarize what we saw in 2021. Also, it tries to read between the lines noteworthy information for the important developments in 2022.

The Chinese Intervention

Banning mining operations in China was motivated by the need to curb all those activities that have upset the country’s financial order in recent years. In the eyes of the Chinese regulator, cryptocurrencies appear to favor money laundering, illegal fundraising, and other criminal activities.

The Chinese central bank enforces its digital Yuan by scorching all privately-issued cryptocurrencies.

The operation aims to re-establish the state monopoly on payments, which private companies like Alibaba, Tencent, and WeChat, have recently endangered. China’s desire to bring the technology sector under control comes from the intention not to lose leverage over the national financial system.

The Russian Policy

The Russian central bank is considering various options to block investments in cryptocurrencies to stop their circulation. Any initiative in this sense will have to go through the Duma, the Russian Parliament.

The hostility of the Russian central bank towards Bitcoin and other cryptocurrencies is linked to the project aimed at issuing a digital ruble.

The stability risks of the financial system and the containment of volatility may worry Russian policymakers. Experts believe that Russian authorities will eventually link the state cryptocurrency to trade in energy sources, such as oil and gas.

What Is India Doing?

The “Cryptocurrency and Regulation of Official Digital Currency Bill” is a law proposal under discussion in the Indian Parliament. After various slowdowns, the bill has a relatively moderate connotation towards cryptocurrencies.

Initially defined as an “anti-crypto bill,” the proposal seems to be more oriented towards regulating digital currencies instead of a complete ban. Indian economists consider this step essential to launch a study to create a national cryptocurrency.

According to Indian policymakers, the new legislation has the sole purpose of protecting investors and their earnings. Should the project receive approval in its current version, it will still be possible to trade cryptocurrencies.

The government guidelines, in fact, aim to introduce a series of parameters that crypto exchanges will have to respect to operate in India. However, many elected representatives in Parliament strongly oppose this law, calling for a total ban on cryptocurrencies.

The situation, therefore, still appears somewhat confused in the country. Currently, the Indian position seems to be less restrictive than China’s. However, it is likely that international pressure may change the bill’s final text.

The CBDC Experiment

The above countries are moving in a common direction. For instance, they aim to discourage (or ban) the trading of classic cryptocurrencies in favor of centralized digital currencies.

While this concept will not appeal to those who support the power of decentralized blockchain technology, many countries are working towards this goal. Technically, in this case, we speak of CBDC (or “Central Bank Digital Currency”).

CBDC is a relatively new concept, but the exploratory and experimental phase is already well underway. Think, for example, of Kazakhstan: Kazakh citizens will be able to open bank accounts and perform transactions with cryptocurrencies.

The pilot project aims to involve a series of banks in the circulation of a CBDC, creating the first official national crypto exchange. This is not an exception in Asia. Uzbekistan is ahead of the Kazakh government, making the UzNEX digital portal already in 2020.

The Political Crypto Trend of 2022

The trend initiated by Asian policymakers in the crypto universe seems to be relatively straightforward. The world is eagerly waiting to see how the digital Yuan will behave during the Beijing Winter Olympics.

Consumers will be able to use the new currency for various purposes during the event. This will represent the first massive adoption of a centralized digital currency at a mainstream sports event.

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It will be interesting to see if a centralized digital currency will be as successful as other popular cryptocurrencies. Moreover, large economies such as India and Russia are curious about what will happen in Beijing. Lastly, they will draw their own important political conclusions.

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