China Renews Call to Crackdown on Bitcoin Mining and Trading

Jafrin  |  May 22, 2021

Despite China being the largest Bitcoin mining network in the world, authorities in the country have renewed their crackdown on cryptocurrency mining operations. Apparently, financial institutions and payment companies are also banned from providing cryptocurrency services to customers.

China to Crackdown on Bitcoin Mining and Trading Operations

In a meeting held on May 21, 2021, the Financial Stability and Development Committee of the State Council, headed by Liu He, Vice-Premier of the People’s Republic of China, discussed ways to mitigate financial risks in the country ensure a robust financial and economic cycle.

The meeting came just days after three Chinese industrial bodies issued a statement on banning banks and payment companies from providing cryptocurrency services to customers. Per the new rule, accepting cryptocurrencies as payment will even be termed illegal.

This is not the first time the Chinese government has tried to clamp down on Bitcoin mining.

Back in 2019, China’s National Development and Reform Commission (NDRC) listed Bitcoin mining among the preliminary list of industries it wanted to eliminate citing concerns including energy-wasting concerns. However, the final version removed cryptocurrency mining from its list.

The same year, China's central bank, the People's Bank of China issued a statement saying it would ban all domestic and foreign crypto exchanges and Initial Coin Offering platforms.

By the end of April 2021, North China's Inner Mongolia Autonomous Region said it would shut down all cryptocurrency mining operations to reduce carbon emissions in the coal-based region.

Bitcoin Whales Are Buying the Dip

China continues to dominate the global Bitcoin mining network. Data from the Cambridge Center for Alternative Finance (CAF) shows that the country accounted for over 70% of the world's computing power for Bitcoin between September 2019 and April 2020.

Meanwhile, Bitcoin whales and market makers have increasingly bought the Bitcoin dip at $36,200 on May 21. Data from the same day indicates that spot exchange volumes surpassed $5.6 billion in just four hours.

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