China’s grouse against cryptocurrencies is far from over. While the Asian giant’s ban on cryptocurrency mining still remains, the People’s Bank of China (PBoC), the country’s apex bank, has stated that it will continue its regulatory measures on the use of cryptocurrencies within China. Chinese authorities have always remained critical about cryptocurrencies and are bent on monitoring transactions based on them.
Following the statement from the apex bank, cryptocurrency exchanges operating within China will have to comply with existing regulations. The PBoC stated that it will make active attempts to eliminate major financial risks and reduce the total number of high-risk financial institutions within the country. Also, the apex bank noted that it will clamor for the enactment of a financial stability legislation suggested by its deputy governor back in March.
China’s Bitcoin mining proscription in May
China’s mining proscription remains one of the biggest negative events to occur in the cryptocurrency space in 2021. In the same vein, it stands out as the biggest decision ever taken by China against cryptocurrencies. Chinese authorities have always been open about their displeasure against Bitcoin and other cryptocurrency assets. More than anything, they believe that they could come in handy for vices
The ban on cryptocurrency mining set the pace for other developments, both bullish and bearish in the cryptocurrency market. Among all the negatives, the market crash resonated more, which saw the price of flagship cryptocurrency slashed by 50%; a few other altcoins bled by over 70% their prices. Other negatives that occurred included a reduction in hashing power.
While the latter may have been bearish for the entire market, a handful of market observers and analysts considered this as a plus for the global hashing power. Before the mining proscription, China generated 75% out of the entire global hashing power for Bitcoin mining, as most Bitcoin miners were located there. However, as the ban surfaced, China lost its hashing power monopoly to an extent. Available data pegs the current hashing power for China at 46%.
Miners Resort to Clean Energy Sources For Mining Following Concerns on Carbon Pollution
Another positive was clean energy Bitcoin mining, which came into picture after China complained of carbon pollution from mining with coal energy. In light of this, miners resorted to nuclear energy, hydroelectricity, and cow manure as sources of power for their mining operations. In its July report, the BMC declared that clean energy Bitcoin mining was already at 56%.
At the base of the mining proscription and cryptocurrency regulations is China’s CBDC, the Digital Yuan or e-CNY, which it has made significant progress on. The testing for the CBDC began in May, and the first phase was completed a week ago, after registering massive transaction volume. There is no doubt that China hopes to pave the way for its Digital Yuan to thrive without any challenge.