Between liberalization and prohibition
This chapter explains the interactive relationship between blockchain technology and the corresponding policy responses of governments it has provoked. It reviews existing global governance and global political economy literatures on the implications of technology change. The chapter explores the origins of Bitcoin and the challenges it has brought for governance. Nearly a decade since its inception, the global popularity of Bitcoin reveals the increasingly established nature of the emergent technology. The extant literature largely ignores the regulation of Bitcoin in China. China has grown to be the largest Bitcoin market globally. Despite the existing problems and uncertainties in the future, China provides both the Global South and the Global North an alternative between two other polarized extremes of either liberalization or prohibition. Bitcoin is exposed to market risks and volatile speculation. Investors have flooded into the market and pumped up Bitcoin prices. The two common illegal uses of Bitcoin across jurisdictions are in digital black markets and for money laundering.