In recent years, "cracking down on virtual currency" has almost become a routine news item for regulators: on one side, multiple departments are working together to regulate mining, speculation, and illegal trading; on the other side, the crypto market hits a new high every once in a while, even sparking a new wave of enthusiasm.
The question arises: since the country has been continuously cracking down, why can't digital virtual currencies be "eradicated"? Why do these bans continue to be ineffective?
The reason can actually be summed up in three words: real-world problems.
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① Trading is global; it cannot simply disappear just because one country shuts its doors.
Virtual currency is decentralized; if you shut down domestic exchanges, there are still overseas exchanges; if you ban mining, there are global mining pools; if you restrict transfers, there are countless wallets and cross-chain bridges.
The internet has made capital flow no longer restricted by geographical boundaries.
You cannot unplug all the servers in the world, nor can you have all countries legislate and enforce uniformly.
This is not 'permission,' but 'impossible to completely seal off.'
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② Demand always exists, gray areas, speculation, hedging... all push it to survive.
Virtual currency has different meanings for different people:
• Some use it as a speculative tool, hoping to get rich overnight
• Some use it as an asset hedge, fearing inflation and currency devaluation
• Some use it for cross-border transfers
• Some see it as part of future technology (blockchain, Web3)
As long as these demands exist, virtual currency will always have a market.
Demand is more stubborn than policy.
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③ The focus of the crackdown is not on 'coins,' but on 'illegal activities.'
The attitude of the country is actually very clear:
✔ What is being cracked down on is:
• Fraud
• Pyramid schemes
• High leverage
• Illegal trading
• Money laundering and other risky behaviors
✖ It is not to 'eliminate Bitcoin'.
It's like banning gambling, but lotteries still exist; banning usury, but financial services continue to develop.
Regulation is to prevent risks, not to wipe out the 'coin circle' from the earth.
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④ The country needs stability, not for everyone to speculate on coins
Virtual currency is highly volatile and is a typical high-risk asset.
If ordinary citizens participate on a large scale, once there is a sharp decline, the losses will be huge and will directly harm social capital security and financial stability.
What the country wants to avoid is systemic risk.
This is the bottom line that must be controlled.
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⑤ The more you strike, the more it becomes 'underground.'
This is also reality.
The more you prohibit, the more people turn to more concealed and decentralized channels.
Thus appeared:
• Multiple transfers
• Decentralized exchanges
• Overseas KYC
• Quantitative robots
• OTC off-exchange trading
On the surface, it seems quiet, but underground it is even more active.
This leads to a state of 'seemingly not allowed, but can never be completely banned.'
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⑥ More importantly: the global trend does not shift based on the will of a single country.
The US icon is promoting spot ETFs
Europe icon is legislating regulations
Singapore icon and Dubai are building crypto centers
Japan icon allows listed companies to hold coins
Korea icon has entered on a large scale
Hong Kong icon is gradually opening up
……
Virtual assets have become part of global asset allocation.
Things from the era of technological revolution cannot be removed from the earth by a piece of prohibition.
The times will push it to continue existing.
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Conclusion:
Virtual currency is not allowed, nor is it legalized; but it is also not something that can simply disappear with a 'one-size-fits-all' approach.
It exists in a way of 'regulatory pressure, global promotion, and steady technological advancement.'
Can it be banned?
Theoretically, it can.
In reality, it is very difficult.
This is the answer.
