How effective is China's cryptocurrency trading ban?

【Author】 Chen, Conghui; Liu, Lanlan

【Source】FINANCE RESEARCH LETTERS

【影响因子】9.848

【Abstract】Cryptocurrency trading is subject to strict government-imposed restrictions in China since September 2017, when trading platforms were shut down. Using a VAR-GARCH-BEKK model, we investigate the effectiveness of this trading ban by examining its consequences on the relationship between Chinese investors' attention and Bitcoin. Our results demonstrate that Chinese investors played a dominant role in the Bitcoin price formation before the ban, and that their influence has not significantly decreased after the shutdown of Chinese trading platforms. Aiming to explain our findings, we provide strong evidence that the crackdown on Bitcoin trading has not been effective as Chinese investors continue to purchase Bitcoin using the stablecoin Tether instead of Chinese yuan.

【Keywords】Chinese Bitcoin trading ban; Investor attention; Tether; VAR-GARCH-BEKK

【发表时间】2022 MAY

【收录时间】2022-07-30

【文献类型】理论性文章

【主题类别】

区块链治理-法律治理-数字货币监管