Three of China's tech giants - Baidu, Alibaba and Tencent - are moving quickly to keep pace amid the government's clampdown on cryptocurrency, with them banning cryptocurrency-related activities from their platforms.
First up is Baidu, China's dominant internet search engine. The company has shut down its popular cryptocurrency-related chat rooms, known as Post Bar services, including “Digital Currency Bar” and “Virtual Currency Bar.” A search of the two online forums shows that they are banned "in accordance with relevant laws, regulations and policies."
This is followed by Alibaba and Tencent, which are cracking down on cryptocurrency transactions on their respective mobile payment services.
Tencent said that the company is banning cryptocurrency trading on its social app WeChat through measures including real-time monitoring of daily transactions and block suspicious transactions when necessary. As for Alibaba, it said that it's restricting or banning accounts on Alipay when they are found to involve cryptocurrency trades.
Since early 2017, there has been an increased Asian funds that were actively involved in early-stage cryptocurrency investing, with investors directing 40 percent of the record $154 billion in global venture financing. The main reason for this was because Asia had a more favorable set of regulations compared to the U.S..
This puts China at the forefront of the focus.
China started its cryptocurrency clampdown in September 2017 with bans on domestic exchanges and initial coin offerings (ICOs), a controversial crowd fundraising method involving many cryptocurrencies.
The government effort prompted country's exchange operators and ICO projects to migrate their operations to friendlier jurisdictions, which include Singapore. But still, many were focusing on China's mainland to attract Chinese customers through online services like WeChat and others.
With China intensifying its cryptocurrency-related clampdown, five top-level Chinese regulators - including the central bank and the ministry of public security - have issued a warning against illegal fundraising activities in the names of “blockchain” and “virtual currency.”
The government is also blocking access to 124 websites operated by offshore cryptocurrency exchanges that provide trading services to Chinese citizens.
There is also notice that bans hotels, office buildings and shopping malls from hosting events promoting cryptocurrencies.
"Such activities are a gimmick of ‘financial innovation’ but Ponzi schemes in the essence," the notice said.
China’s government policy has strict rules on how companies can choose to operate their businesses.
While China has outlawed cryptocurrency trading and initial coin offerings (ICO), the nation is betting big on blockchain, most notably after Presiden Xi Jinping endorsed the blockchain technology.
He claimed that it is one of the technologies capable of accelerating "the breakthrough in application and bred new life science fields represented by synthetic biology, gene editing, brain science, and regenerative medicine."
Baidu, Alibaba and Tencent have been working on blockchain, the technology that powers Bitcoin.
While the three have been critical of cryptocurrencies and their utility, they are all working on multiple blockchain-based projects, with Alibaba owning the highest number of blockchain patents in the world.
