I think China is showing that state power is what backs up a currency, not just a conspiracy of quants moving numbers around. They’re ahead of the game in creating a usable, state backed crypto, which is probably the real futue of blockchain tech for currency, and
they’re pushing out the punters before they get so rich they can’t be so easily done in. I dont think this move will backfire for China, and if we choose to go the other route and make crypto safe havens in the west, we could have a serious problem down the line.

But isn’t the primary utility of bitcoin in China, the fact that it is ideal as a means of stashing wealth beyond the reach of the government, and for that matter, any government? Aren’t the coins also the frictionless and clandestine method for getting money out of the country?

I don’t know if that’s the primary utility of Bitcoin in China, but it obviously can undermine state power, so China saw that it needed to be reigned in. China may or may not be capable of putting a complete stranglehold on all crypto flowing through whatever they consider to be their territory, but pushing these big dark money power sinks offshore will weaken them in relation to China, not strengthen them.