“They will now lose around $6 billion worth of annual mining revenue, all of which will flow to the remaining global mining regions,” he added, citing Kazakhstan, Russia and the United States. Virtual currency mining had been big business in China before May, accounting for more than half the world’s crypto supply, but miners have been moving overseas. “This is the manifestation of the crypto mining and Китайская криптовалюта trading crackdown announcement … back in May,” said NYU’s Ma. Tom covers crypto companies, regulation and markets from London, focusing through 2022 on the Binance crypto exchange. He has worked at Reuters since 2014, with a previous posting to Tokyo where he uncovered abuses in Japan’s immigration system and won a joint Overseas Press Club award for reporting on the tobacco giant Philip Morris.
The move also hit cryptocurrency and blockchain-related shares, although they clawed back some of those declines in morning U.S. trading. While U.S. regulators are closely scrutinizing digital asset risks, they have said they also offer opportunities, including to promote financial inclusion. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. “The losers in all of this are plainly the Chinese,” said Christopher Bendiksen, head of research at digital asset manager CoinShares.
China’s National Development and Reform Commission said it will work to cut off financial support and electricity supply for mining, which it said spawns risks and hampers carbon neutrality goals. Analysts say China also sees cryptocurrencies as a threat to its sovereign digital-yuan, which is at an advanced pilot stage. They also worry that “mining,” the energy-intensive computing process through which bitcoin and other tokens are created, is hurting global environmental goals. The repeated prohibitions highlight the challenge of closing loopholes and identifying bitcoin-related transactions, though banks and payment firms say they support the effort.
The People’s Bank of China (PBOC) said cryptocurrencies must not circulate and that overseas exchanges are barred from providing services to China-based investors. It also barred financial institutions, payment companies and internet firms from facilitating cryptocurrency trading nationally. China in May banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and issued similar bans in 2013 and 2017. Global payment company PayPal(PYPL.O) does not offer crypto services in China, a spokesperson said. SHANGHAI/LONDON, Sept 24 (Reuters) – China’s most powerful regulators on Friday intensified a crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks. Despite the initial shock, analysts said they did not expect the crackdown to dent global crypto-asset prices long term as companies continue to adopt crypto products and services.
Cryptoverse: Bitcoin miners get stuck in a bear pit
China’s cabinet vowed in May to crack down on bitcoin mining and trading as it sought to mitigate financial risks, without going into details, sending bitcoin tumbling 30% in a day. Friday’s news dashed hopes among crypto-enthusiasts that the cabinet would fail to follow through on its threat. The government will “resolutely clamp down on virtual currency speculation … to safeguard people’s properties and maintain economic, financial and social order”, the PBOC said. Chinese government agencies have repeatedly raised concerns that cryptocurrency speculation could disrupt the country’s economic and financial order, one of Beijing’s top priorities.
“China’s actions haven’t held back crypto’s rise too much in the past so I wouldn’t be surprised to see it bounce back once more,” wrote Craig Erlam, an analyst at currency broker OANDA. U.S.-listed miners Riot Blockchain (RIOT.O), Marathon Digital (MARA.O) and Bit Digital (BTBT.O) slipped between 2.5% and 5%, while San Francisco crypto exchange Coinbase Global (COIN.O) fell just over 1%. “Beijing is so hostile to economic freedom they cannot even tolerate their people participating in what is arguably the most exciting innovation in finance in decades,” top U.S. “In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries,” said Winston Ma, NYU Law School adjunct professor. Friday’s statement is the most detailed and expansive yet from the country’s main regulators, underscoring Beijing’s commitment to suffocating the Chinese crypto market.