To protect itself from financial threats, China is taking action against the blockchain market and Bitcoin mining. The nation would enact strict rules to combat illicit activities in the cryptocurrency sector. However, as the financial stability and growth committee has said, China strives to sustain currency and bond market stability.
Liu He, the committee’s vice president, made both of these remarks just a few days after three Chinese organizations tightened their regulations. Banks and payment providers in China have been barred from offering services linked to cryptocurrencies by business organizations. This news sent Bitcoin into a tailspin, with the cryptocurrency dropping a significant amount of value in the hours that followed.
Liu He’s battle against the cryptocurrency industry
Liu is a Chinese writer. He is the highest-ranking Chinese agent to call for a crypto-attack, especially on Bitcoin publicly. It’s the first time the state council has spoken out publicly on cryptocurrency mining.
Bitcoin’s value plummeted once more due to the news, and it now faces weekly losses of 15%. Other cryptocurrencies, such as Ethereum, Dogecoin, and Litecoin, have been influenced by the decrease. The Chinese government is particularly concerned about merchant security and the prevention of money laundering.
Hong Kong has proposed that the region’s business regulator approve crypto exchanges in recent days. This measure would benefit professional investors more than just some cryptocurrency merchants.
Although Jehan Chu, a partner at Kenetic Capital, agrees that crypto regulation is unavoidable, he believes that these policies drive Asia away from the industry. Other companies may dominate mining outside of Asia, such as in Iran, where electricity is less expensive. CCTV, China’s state broadcaster, has warned that Bitcoin is no longer suitable for investing and has become a risky asset.
Mining of cryptocurrencies in China
In the cryptocurrency market, mining is a booming industry in China, accounting for more than 70% of all mines worldwide. But, according to some reports, mining in China has decreased in recent years.
According to Winston Ma, China’s anti-mining crackdown is causing a slew of issues for global markets. Chinese crypto network makers such as Ebang International Holding and Canaan took steps that impacted operations in New York.
China has outlawed bitcoin trading and decentralized currency transactions, but it does not prohibit individuals from using cryptocurrencies.
China’s monetary policy will be very responsive in this situation, according to Friday’s announcements. As long as the Yuan exchange rate stays constant at acceptable levels, this will happen. These reports from China should be more precise; many investors and businesses are anticipating them.