It's not that governments like China ban cryptocurrencies because they necessarily expect the technology to fail. The point is, they want to experiment with potentially trillions of dollars in play.

With its latest move, China has joined a small list of countries advocating a ban on crypto transactions. This is a complete opposite from El Salvador, which adopted Bitcoin as legal tender this year and has been praised by both libertarians and bitcoin supporters alike. Meanwhile, in the United States, cryptocurrency trading is allowed, but regulators are closely monitoring it.

Understanding many aspects of this multifaceted battle for market control will be key for millions of investors hoping to cash in on the crypto craze. The struggle should affect the global financial system, where news about products such as bitcoin-traded funds, odd-named digital tokens and NFT assets emerges every day. The super-rich are also involved, and major financial institutions are shifting to digital currencies.

More broadly, the struggle will also affect sociocultural discussions on everything from climate change to inequality and trade to fiat currencies. How the world's two largest economies - the United States and China - advance in their market surveillance efforts is likely to have the most far-reaching consequences.

"Crypto has become too big to ignore," said Bitwise CIO Matt Hougan. "a $ 2 trillion industry and every major Wall Street bank is helping investors access it and now they have to fight it."

China shook financial markets this week by announcing that all cryptocurrency-related transactions would be considered illegal in the country, echoing less straightforward exceptions made back in 2013, when tough measures were taken against initial coin offerings, crypto exchanges and cryptocurrency mining.

As a replacement, it plans to release its own digital currency - digital yuan. It is one of 81 countries that are exploring their own digital currencies, a list that started with early adopters like Venezuela and Estonia, but now includes larger countries like the United States.

China's 1.4 billion population is likely to give it an edge when it begins rolling out digital yuan globally at the Beijing 2022 Winter Olympics - a prospect that has prompted some US politicians to ban American athletes from using electronic coins while there.

"For China, I think it's pretty clear they want to promote the digital yuan, and that they are simply taking care of the competition," said Nicolas Christin, an associate professor at Carnegie Mellon University.

China said 10 regulators, including the central bank, will work together to track cryptocurrency-related activities. The ban even states that foreign exchanges are prohibited from providing services to investors from the mainland. The country's actions over the past few years have already led to a decline in local trading, said Randall Kroshner, deputy dean of the University of Chicago Booth School of Business and a former governor of the Federal Reserve Board. "Even with a VPN, it can be very difficult to connect and it can slow down," he said.