China and America Enter Sanctions War, Bitcoin Affected – Trustnodes

China and America Enter Sanctions War, Bitcoin Affected

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The United States has imposed sanctions on a member of the Politburo and two other high ranking Chinese officials over the treatment of ethnic turks in Xinjiang.

“The United States will not stand idly by as the Chinese Communist party carries out human rights abuses targeting Uighurs, ethnic Kazakhs and members of other minority groups in Xinjiang, to include forced labor, arbitrary mass detention, and forced population control, and attempts to erase their culture and Muslim faith,” Secretary of state Mike Pompeo said.

Following an investigation by the Associated Press, Jo Biden called the treatment of Uighurs as “unconscionable crimes” and said he would work to “support a pathway for those persecuted to find safe haven in the United States and other nations.”

78 senators and members of Congress have called for a UN inquiry into whether the actions in Xinjiang constituted genocide.

These sanctions passed with overwhelming support in Congress, making this a bipartisan matter and more and more there appears to rise an international consensus.

“Paris and Berlin are pressing the EU to ban the export of police equipment such as tear gas and rubber bullets to Hong Kong. They also want the bloc’s 27 members to give long-term refuge to political activists fleeing repression in the territory and to grant scholarships to more Hong Kong students,” reports FT.

“India plans to invite Australia to join the annual Malabar naval exercise [pictured above, file photo]…

The exercise will bring together the navies of India, Japan, Australia and the U.S. in the Bay of Bengal at the end of the year, according to senior Indian officials who asked not to be identified, citing rules,” says a local paper.

“China has never had the intention of challenging or replacing the US and has no intention of entering into total confrontation with the US,” says Wang Yi, China’s foreign minister.

A new security law passed in Hong Kong however prohibits sanctions against Hong Kong or China, making life difficult for companies that are now caught between the American law and Chinese law.

“We’re currently advising a number of clients who are concerned with how broadly certain aspects of the National Security Law could be construed, and how that may come into play in local implementation of U.S.’s Hong Kong Autonomy Act generally,” said Tamer Soliman, a Washington-based partner and global head of the Export Control & Sanctions practice at law firm Mayer Brown.

Sanctions have also been placed on the Xinjiang Public Security Bureau as a whole, making it a criminal offense in US to conduct financial transactions with those sanctioned.

What China’s response will be is not clear. They’ve said they will reciprocate as relations continue to deteriorate with democracies in general seemingly circling the wagon and standing as one.

Bitcoin Affected?

US authorities have previously announced certain bitcoin addresses as being sanctioned, so claiming enforceability of their laws.

However, it is generally difficult to attribute identity to bitcoin addresses, especially if those bitcoins are mined.

China accounts for some 95% of all produced asics which mine the coins, and for some 70% of all mined bitcoins.

So getting what can be called genesis coins shouldn’t be difficult in the country, getting them either from miners or by mining oneself.

The officials however would probably be able to transact through their own Chinese banks, but if these sanctions expand to companies and the like, bitcoin is already used for some international trade especially to and from China.

Thus while Chinese authorities have banned crypto exchanges for ordinary users, they have accommodated their miners and even have celebrated their listings on US stock exchanges.

In addition Over the Counter (OTC) trading is generally permitted, with the usdt stablecoin attracting much usage there.

So how much effect these sanctions would have in practice is not too clear, but politically and symbolically of course they are a clear indication that relations are getting a bit frosty.

Economically too sanctions do have an effect on smaller countries like Iran or Venezuela, both of whom have turned to cryptos in some ways, but for a country like China where arguably they’re more advanced in payments through things like WeChat Pay, they may have considerably less effect.

Even for far smaller Russia, sanctions have not had as much of an effect as one would have expected because realpolitiks does at time give way to real economics.

Yet sanctions are a fairly significant tool that here clearly indicate a very noticeable change in tone which presumably all companies in democracies will pay close attention to.

Leading more to self enforcement for banks, and for other companies they’re potentially wondering whether the political climate is still accommodative towards their investment.

For everything else there’s bitcoin which is politically neutral and whether we like it or not can continue to facilitate some trade, thus we should expect demand to rise a bit following this now fourth stage of sanctions after the currency wars, the trade war and the tech war.

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