author: Angelika Kaldus
China to Ban Crypto Mining? BTC Exchange Rate Dips
Bitcoin mining in China may be restricted or banned - the value of BTC is dipping.
- China's deputy prime minister has spoken out about cracking down on bitcoin mining;
- The value of BTC is falling at the speed of light.
Last week we wrote about China banning cryptocurrency-related services from financial institutions and payment companies, with the People's Bank of China declaring that virtual currencies aren't real money - so they can't be treated as means of payment. It has only just emerged that one Chinese institution is opening a hotline to report suspicious mining operations, and already now China's deputy prime minister is mentioning an intense crackdown on crypto mining, speaking mainly about bitcoin.This may mean that there is a chance that BTC mining farms and mines will be shut down soon.
The Chinese authorities have long made it clear that they are not a big fan of cryptocurrencies. In 2017, they banned the acquisition of virtual currencies to fund ventures through an initial public offering of a token, known as an ICO (initial coin offering), and in 2019, there were talks of a possible ban on mining. Tougher restrictions may soon come into effect, as the May 21 statement from the Financial Stability and Development Committee (FSDC) suggests - the meeting set out the main objectives of the commission's work, and among them were: "(...) cracking down on bitcoin mining"..
China accounts for about 75% of BTC mining, so the words hit the cryptocurrency market hard. The value of bitcoin has been falling for days, and has recently fallen to about 31 thousand dollars - both as a result of reports from Asia and statements by Tesla's CEO Elon Musk. Currently the BTC exchange rate is around 38 thousand dollars.
The Chinee authorities justify their actions by the fact that limiting cryptocurrency trading will contribute to greater stability of financial resources and a more effective fight against money laundering, drugs and smuggling; they also emphasize the negative impact of bitcoin mining on the environment. But whatever the reason, China will lose on the new policy and its closer or more distant neighbors will gain. Justin d'Anethan - a specialist at Diginex, which offers financial services for virtual funds and cryptocurrencies - predicts that BTC miners will move to Mongolia, Kazakhstan or Afghanistan.