Bitcoin faces a new Chinese escalation campaign
Bitcoin faces a new Chinese escalation campaign

China is working hard to fight the bitcoin mining industry after three days, according to a government cabinet announcement. Regulators have confirmed the ban on digital tokens in financial transactions, which could put more pressure on the cryptocurrency industry after global transactions last week.

A statement issued by the Financial Stability and Development Committee of the State Council, led by Vice Premier Liu He, said that the government has taken strict measures against mining and trading practices in Bitcoin, and it has also consistently prevented the transfer of personal risk to society. Chinese President of Economy and Finance.

According to estimates by the Cambridge Bitcoin Energy Consumption Index, China is the largest cryptocurrency mining site in the world, accounting for 65% of Bitcoin's hash rate. This is the process that the Bitcoin network uses to verify transactions and mine new tokens for cryptocurrencies. Segment capacity. .

Since 2019, the government has banned financial transactions of bitcoin and other tokens. So far, the government has ignored cryptocurrency mining in Inner Mongolia, Sichuan, Xinjiang and other regions.

The chief researcher of the Shanghai Academy of Social Sciences said: The writing of the statement left little room for cryptocurrency mining.

However, the latest statement did not achieve the goal of a blanket ban on cryptocurrency mining, nor did it specify the measures involved in the activity or their scope.

According to the European Commission statement, the bitcoin price fell 20% to $ 33,550 and then increased to $ 37,500.

Comments from electric car giant Elon Musk, Tesla billionaire, have exacerbated the volatility of cryptocurrency prices.

The latest move against bitcoin mining is the three-nation backed Chinese Financial Association, which issued a joint warning earlier this week that volatile cryptocurrencies have risks.

As cryptocurrencies continue to be sold in China, some miners seem to trust Beijing's comments more than its actions.

If China bans all mining activity, it will be a turning point for Bitcoin as most of its processing power will be squeezed.

The State Council Committee Statement focused on green development transformation, which is the central government's commitment to achieving clean energy and reducing carbon dioxide emissions targets.

Cryptocurrency mining requires large amounts of electricity to run large groups of computer servers, to perform the complex calculations required for cryptocurrency transactions, and to regulate the air required to cool these facilities.

The Chinese central bank is promoting its own digital currency, CBDC, so it should not be confused with the cryptocurrency because the digital RMB is a digital currency issued by the People's Bank of China that is equal to the value of paper money and the RMB. Country.

Chinese financial institutions, which are banned from processing cryptocurrency transactions, are adopting the digital renminbi.

Many local and regional governments in China have taken action against cryptocurrency mining enterprises.

Earlier this week, northern China's Inner Mongolia (one of the top cryptocurrency mining sites) requested full reports on these companies in order to phase out energy consumption activities in the region due to lower electricity prices.

Bitcoin mining consumes about 121.36 TWh per year, which is more than the total energy consumption in Argentina.

The massive consumption of the bitcoin mining industry conflicts with China's commitment to reduce CO2 emissions by at least 65% by 2030 compared to 2005 in order to achieve CO2 neutral emissions by 2060.

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