China Bans Cryptocurrency Trading
China’s top regulators on the 24th released a blanket ban on all crypto currencies transactions and mining. Although this was a bold decision china has actually in the past issued some anti crypto currency legislation before. In May they banned payment companies from providing services related to cryptocurrency transactions. The decision was partly based on a globalised effort to crackdown on cryptocurrency as governments around the world claim that highly volatile currencies could damage their control of financial systems. And according to The Peoples Bank of China they will “resolutely clamp down on virtual currency speculation ... to safeguard people's properties and maintain economic, financial and social order”. In addition to financial reasons, China is worried that “mining” will disturb their carbon neutrality goals. The reason why this might disturb their carbon neutrality goals is that “mining” is a very energy intensive process and for bitcoin and other tokens to be created it is a very demanding computing process. So in light of this, China will cut off financial support and electricity supply for mining. The effects of China, which is a large market for cryptocurrency, banning cryptocurrency can be seen by their stock value which dropped 9%. Yet there is hope even though the initial drop was significant analysts say that in the long term it won’t affect the cryptocurrencies as much because of companies investing in cryptocurrencies products and services. The biggest losers of the ban are not the biggest crypto companies like you’d expect; they are the crypto companies that originated in China and have a user base of mostly Chinese. In addition to this crypto currency was a big business tot the Chinese which accounted for more than half of the worlds crypto supply or as Christopher Bendiksen would put it “The losers in all of this are plainly the Chinese.They will now lose around $6 billion worth of annual mining revenue, all of which will flow to the remaining global mining regions.”
-Anthony Kindness
Source:https://www.reuters.com/world/china/china-central-bank-vows-crackdown-cryptocurrency-trading-2021-09-24/
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