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Chinese Government Begins Clampdown On Digital Payments Sector

Ever since the advent of digital assets in the country, the Chinese government has vehemently opposed the assets and all the potential it stands for. One surprising thing remains that while the government of the Asian nation has kindled its anger towards crypto exchanges and their operations across the country, it has always supported the mining sector. As it stands now, all that is about to change.

A news report by a local news outlet, Wu Blockchain, said that Bitcoin miners are currently struggling after being affected by a ripple effect of the government’s action. According to the news outlet, about 74% of the total miners across the country complained bitterly over their inability to pay their electricity bills after the government’s clampdown on the digital payments sector.

The Chinese government wants to check money laundering

According to the explanation that was given in the news outlets report, the government froze several cards belonging to several digital payments platforms. However, this move has cost most miners their operations as they have been impacted by the card freezes’ negative effect. With the usual belief that the government is always against digital assets on all forms, the miners in the Asian country are currently stranded.

The card freezes started not long ago as the current administration announced that it reached the consensus to check money laundering activities. Due to this clampdown by the government, banks have been asked to suspend access to accounts linked to crypto activities temporarily.

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With access to the yuan now limited, miners are currently facing issues on ways to exchange their mined Bitcoins for cash. Furthermore, this small issue has aggravated most of the country’s citizens being unable to make payments. This is yet another major blow to Chinese miners after having to endure what could be termed a very terrible year in the industry.

China’s lead in Bitcoin mining lead might be cut short in the next few years

China is currently dragging its feet when it comes to Bitcoin mining, as other countries are trying to venture into the industry. However, the government’s actions regarding this current problem faced by miners could determine the fate of the mining industry in the country in the coming days.

China is presently enjoying Bitcoin mining due to some crucial factors that have contributed to the industry’s thriving over the years. China boasts cheap and easily accessible labor, affordable electricity, among other things that are needed to increase the mining industry’s work rate.

Also, Chinese miners can quickly get new and improved mining rigs anywhere in the country because most of them are originally made in the country. One major aspect that has boosted the country when it comes to Bitcoin mining is cheap and easily accessible hydroelectricity.

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The Sichuan province is said to be one of the best locations when it comes to cheap electricity. Reports have often claimed that the region charges miners as low as $0.02 per kWh during the rainy season and a look at the Bitcoin mining map shows that the region is responsible for about 6% of the total Bitcoin hash rate across the globe.


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Adebayo Owotunse (Nigeria)

Adebayo Owotunse is a versatile writer who has written hundreds of crypto articles for dozens of agencies across the years. He is now also the newest addition to the Tokenhell writers team.

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