Reports & Analysis

Restrictions in China are not over yet; Should heavier restrictions be expected?


Despite the recent severe bans imposed by the Chinese government on activities related to the extraction and trading of digital currencies, there are still reports of tightening of these restrictions.

to the the report Many miners are still waiting in China to move to other countries, according to the Economic Times, which was also published in the Chinese daily People Daily, the official media of the Chinese Communist Party. They did not place.

The report claims that despite attractive opportunities in more liberal countries, such as Canada, Russia and Kazakhstan, some Chinese miners have not left the country.

Analysts warn that digital currency bans are not over yet. Despite the ban on mining activities in some provinces of the country, the ban on digital currency transactions by banks and the suspension of electronic payments in this area, the Chinese government may be planning to impose heavier restrictions.

Analysts say the Chinese government intends to close legal loopholes that allow miners to use cloud mining programs. In addition, transactions between individuals, over-the-counter transactions, and ownership of digital currencies remain legal and unassigned. The government has not yet taken action to ban extraction from renewable energy. However, many Chinese miners who have been ordered to stop, such as miners in Sichuan Province, used hydropower.

Dong Ximiao, a senior fellow at the Zhaolian Finance Institute and head of the finance department at Zhongnan University of Law and Economics, said the Chinese government’s move to ban bitcoin mining and trading was a serious and tangible move. have been.

He said:

New follow-ups are expected to begin soon. With stronger and more targeted oversight measures, the rules become stricter. They will not rest.

The Economic Times also reported that the Chinese government wants to control Internet search engines and social networks to prevent Chinese-origin exchange results from being displayed to Chinese users. In this case, results for searches for Huobi and Bainance exchanges on the Baido and Weibo platforms will not be displayed.

Some Chinese miners are still alive with hope. The exorbitant costs of relocation and the uncertainty of regulatory oversight in other countries have delayed many of their activities. Some miners are looking to loosen regulations in some parts of China. If these policies are implemented more freely in some areas, there is still hope.

However, Dong Ximiao claims that the Chinese government’s next step will destroy the hopes of the country’s miners, as they intend to address legal shortcomings so that they can monitor the sector more effectively and prevent the extraction of digital currencies.

China plans to reduce carbon emissions by 2030 to zero by 2060.

However, small hydropower plants in Sichuan, Yunnan, Gansu and Guangxi provinces with a capacity of 50,000 kilowatts or less have also been affected by recent bans. Many of these power plants have relied on digital currency miners in recent years for revenue. Many of these plants require large amounts of capital to start up and long-term efficiency to offset the initial costs.

The owner of the Sichuan hydropower plant said they had made millions from selling electricity to bitcoin miners. The source of income is now cut off, forcing some owners to sell their power plants.

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