China has banned the use of Bitcoin and other cryptocurrencies, and yet their adoption in the PRC continues. Image: NurPhoto

Bitcoin has, once again, proved it is an unstoppable force in the global financial system – and what’s surprising is that it has done so in China.

Blockchain analytics firm Chainalysis has released its 2022 Global Cryptocurrency Adoption Index detailing world usage of Bitcoin and other digital currencies.

Emerging markets dominate the adoption index. The World Bank places countries into four categories based on income levels and overall economic development: high income, upper middle income, lower middle income, and low income. Using that framework, we find that the middle two categories dominate the top of the index.

Of the report’s top 20 ranked countries, 10 are lower middle income: Vietnam, the Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya, and Indonesia.

Eight are upper middle income: Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia, and Ecuador.

And two are high income: the United States and the United Kingdom.

Arguably the report’s most interesting finding is that, despite last year’s ban, China has returned to rank among the top 10 countries in the world for adoption.

It was last September when the country’s central bank announced that all transactions of cryptocurrencies are illegal, in effect banning digital tokens such as Bitcoin. It was Beijing’s seventh attempt to crack down on the internationally booming sector.

It was the clearest indication yet that China wanted to shut down cryptocurrency trading in all its forms. A statement made clear that those who are involved in “illegal financial activities” are committing a crime and will be prosecuted.

This is why China re-entering the Top 10 of the index this year after placing 13th in 2021 is critical.

It suggests that the ban has either been ineffective and/or poorly enforced.

It highlights Bitcoin’s fundamental qualities: the inherent value of digital, borderless, global, tamper-proof, unconfiscatable currencies.

It will also serve as a wake-up call to other central banks and governments that believe they can ban digital currencies in an increasingly tech-driven world.

More regulation of this sector is undoubtedly on the way, and this is a good thing and one I have long championed.

But it remains clear that if authoritarian Beijing has failed to stop Bitcoin – even in the current protracted bear market – it will be almost impossible elsewhere.

 Indeed, as I have previously said, I expect that more nations will inevitably adopt Bitcoin as legal tender.

These will, naturally, more likely be emerging markets, because cryptocurrency provides tangible benefits to people living within unstable economic conditions.

It seems to me, and others, that China’s Bitcoin ban might have spectacularly backfired on Beijing and, perhaps, further strengthened the case for digital assets.

Nigel Green is founder and CEO of deVere. Follow him on Twitter @nigeljgreen.