China is one of the reasons why Bitcoin investors became suddenly nervous after announcing that it has already banned cryptocurrency exchanges in the country. It was reported last January 2017 on Coindesk that China was considered a dominant player controlling Bitcoin volume not only in the region but also worldwide. And this move by China last September 2017 was also followed by other Asian countries such as South Korea.
After regulating cryptocurrency exchanges, China has now focused on Bitcoin miners. China plans to limit the availability of power to Bitcoin miners. This can be detrimental especially to an industry that needs energy-intensive computer networks to confirm cryptocurrency transactions.
Home of the World’s Largest Bitcoin Mines
China is considered to be the home of many large-scale Bitcoin miners that have invested in massive computing power in order to verify transactions of cryptocurrencies. In fact, according to the Digiconomist Bitcoin Energy Consumption Index, miners worldwide use as much electricity as 3.4 million homes in the United States.
People’s Bank of China (PBOC) has reportedly outlined its plans on Wednesday at a closed-door meeting. According to Chinese officials, one of their concerns is that Bitcoin miners are taking advantage of the low power prices in some parts of China.
In order to stop miners, local officials have been asked to take a closer look at any possibility of high consumption that is related to the digital currency industry. In fact, there are some Chinese miners that have already invested in hydroelectric facilities in the provinces of Yunnan and Sichuan.
In order to implement this move, the Chinese government will also involve The National Development Reform Commission (NDRC), an agency that is in charge of overseeing the power supply.
Is This Going to Be a Long-Term Plan by China?
Many are asking if this is going to be China’s long-term plan to regulate cryptocurrencies. Despite the serious actions that tend to curb cryptocurrencies, there are those experts that have a different opinion on the subject matter. One of which is Bobby Lee, CEO and co-founder of BTCC, a company that was closed down after China made the regulatory changes for digital currencies.
According to him, “In this world, nothing is ever permanent”. He also mentioned that “one day, I think it’s possible that they’ll lift the ban, so called, and they might reinstitute it and license it”. Though he didn’t provide a time frame whether it is going to be a month, a year, or even next week, Lee is confident that China will soon open its doors again to cryptocurrencies.
He mentioned that “The more the governments and the regulators tried to put a squeeze on bitcoin, the more we see that bitcoin is actually resilient”.
Could this be true that China will someday loosen up its restrictions against the cryptocurrency? Or are we seeing a policy that will be imposed for the next years to come? Now that China is also doing the best it can to stop Bitcoin miners in the coutnry, it seems clear that China’s priority is to get rid of cryptocurrency use within their territory.