China imposes stronger regulations to crackdown cryptocurrency

In a State Council committee meeting held on May 21, State Council Vice Premier Liu He pledged to ‘crackdown on Bitcoin mining and trading behaviour’ to combat financial risks. No further details are provided, but Chinese authorities have renewed pressure on banks and payment companies regarding crypto transactions.

In an exclusive interview with Forkast last May 19, co-founder of public blockchain network Conflux, Fan Long stated that ‘the Chinese government does not like the highly volatile, speculative nature of the cryptocurrency market.’

He added that the government might take further action in restricting Chinese citizens from trading yuan with cryptocurrencies in over-the-counter markets.

This is not the first time that China indicated its anti-cryptocurrency stance. In 2013, the country banned financial institutions from handling Bitcoin transactions and in 2017, the Chinese Central Bank outlawed initial coin offerings or ICOs.

In 2021, the Chinese government decried the environmental risks of cryptocurrency mining following the country’s goal to reduce carbon emission.

Last May 24, cryptocurrency exchange platforms like Huobi, the world’s second-largest crypto exchange platform by volume, suspended their crypto-mining and trading services in mainland China.

Crypto mining platform HashCow also followed suit by suspending their new businesses in China and halting the purchase of new mining rigs.

Moreover, BTC.TOP, one of the top mining pools in China, announced in a blog post on Chinese social media site Weibo last Monday that they will suspend their activities in China, citing regulatory concerns.

However, some cryptocurrency exchange platforms don’t see this development as the downfall of cryptocurrency despite Chinese miners accounting for 75% of the world’s Bitcoin hash rate.

BTC.TOP’s founder Jiang Zhuoer said in the same blog that the regulation imposed will only affect the mining farms but it will hold no significance to individual miners and investors. He said that ‘the current situation of Bitcoin mining is not as bad as everyone thinks.’

Justin d’Anethan, a sales manager at Equos crypto exchange, shared in an interview with Forkast that the cryptocurrency market might take a tumble now due to the shock but it will endure nonetheless.

He added ‘The rest of the network of miners, excluding China, must be rejoicing right as the recent moves weaken the competition.’