Chinese government could ban Bitcoin mining & trading altogether
In China, which is a major base for mining crypto assets (virtual currency) such as Bitcoin, the government has announced a policy to crack down on mining and transactions. The crackdown itself has been underway for some time, but since the large amount of electricity consumed by mining is in conflict with the government's 'carbon neutral' policy, even tighter tightening is expected this time.
Liu He, Vice Premier of the People's Republic of China, Vice Premier of the People's Republic of China, China Government Network
China will likely ban all bitcoin mining soon | Ars Technica
China to crack down on mining of cryptocurrencies, delivering a one-two punch to digital tokens after triggering global sell-off | South China Morning Post
https://www.scmp.com/tech/policy/article/3134473/china-escalates-crackdown-bitcoin-mining-trading
On May 21, 2021, the China State Council's Financial Stability and Development Committee stated that its monetary policy policy would be 'to contribute firmly to the real economy,' 'to firmly prevent and manage financial risks,' and 'to continue to deepen reform and opening up.' We announced three things. In this statement, in relation to 'resolutely preventing and managing financial risks,' 'controlling Bitcoin mining and trading activities and resolutely preventing the spread of individual risks to society' was mentioned. I did. The Financial Stability and Development Committee is an organization chaired by Deputy Prime Minister Liu He, a junior high school alumni and economic policy brain of President Xi Jinping.
In China, the government tightened its crackdown on cryptocurrencies in 2013 and 2017, but it remains the center of Bitcoin mining.
Apart from the problem of virtual currency itself, which is 'used for tax evasion and money laundering', there is a problem of 'very large power consumption' in virtual currency mining. A study from the University of Cambridge shows that the annual power consumption for mining exceeds that of the Netherlands and the United Arab Emirates.
Cambridge University explains the power consumption of Bitcoin mining, which consumes national level power, in an easy-to-understand manner --GIGAZINE
However, the Chinese government has set a goal of reducing carbon dioxide emissions to 65% compared to 2005 by 2030 and making it carbon-neutral by 2060. In order to achieve this goal, it will be necessary to reduce the large amount of power consumption due to mining. Inner Mongolia Autonomous Region of China has become a major base for mining due to its low electricity charges, but it is said that mining reduction measures have been taken since March 2021.
Li Yi, a senior researcher at the Shanghai Academy of Social Sciences, told the South China Morning Post, 'When the country makes'carbon neutral'a national strategy, it will not benefit the real economy such as manufacturing and agriculture. Power consumption will not be tolerated. ' 'The total ban on mining in China means that most of Bitcoin's processing power will be lost, and it will be a turning point in Bitcoin's fate.'
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