China’s Crypto Crackdown Intensifies With New Mining Ban And Censorship—But Bitcoin Is Rallying

Top line

China’s crackdown on cryptocurrencies, which crashed markets last month, tightened on Wednesday when another province ordered to stop all cryptocurrency mining operations just hours after popular internet companies began searches for three of the largest cryptocurrencies. Censor the country’s stock exchanges, but Bitcoin prices skyrocket after El Salvador’s historic adoption move – in the hope that other countries will follow suit.

Important facts

On Wednesday, China’s Qinghai became at least the third province in the country to take steps to curb cryptocurrency mining operations due to environmental concerns, prevent local officials from setting up or approve crypto mining projects, and ordering the provincial government on enforcement measures to be informed by June 20th.

In its announcement, the province said it would conduct follow-up inspections at randomly selected supercomputing centers to ensure compliance and punish anyone who violates the ban.

The decision was made early in the morning Reports that Baidu, the country’s most popular search engine, and social media site Weibo have started blocking searches for the OKEx, Huobi, and Binance cryptocurrency exchanges, which is the largest in the world by volume.

“According to applicable laws and regulations, the results of this search are not available,” user reported see if you search for any of the exchanges on Weibo.

Despite Chinese regulation To care crypto markets crashed last month, tokens largely rebounding on Wednesday afternoon, with Bitcoin prices soaring 12% in the past 24 hours as investors praised El Salvador successful vote to make the world’s largest token legal tender.

Crucial quote

“Some larger, more powerful countries are trying to halt or slow down the inevitable move to borderless digital currencies, but this small Central American nation has embraced the largest of them all,” said Nigel Green, CEO of $ 12 billion wealth advisor DeVere Group wrote in a Wednesday note. “El Salvador made history and we can expect other developing countries to follow suit.” Other Latin American countries have already signaled their support for similar implementation measures

Key background

Last month, with a series of warnings targeting trading and mining, Chinese officials sparked concerns that crashed the crypto market. Mai, three Chinese industry groups overseeing the financial sector announced that given the volatility of the market, the country would take action against financial institutions that conduct cryptocurrency businesses or provide related services, saying digital tokens have “no real support value” and prices that “extremely easy” to manipulate. The following week, Beijing said it would “curtail bitcoin mining and trading activities” in an attempt to achieve financial stability by curbing the proliferation of cryptocurrencies. Besides Qinghai, two other provinces—Inner Mongolia and Sichuan– have since announced guidelines to curb or ban mining. The markets fell about 30% on the warnings and have since gained about 15%.

tangent

The cryptocurrency market crashed More than 10% in mid-April after power outages in China led to massive declines in Bitcoin mining rates, which experts believe are correlated with prices. These rates have since recovered, but around 75% of the time Mining the world occurs in China, so widespread bans could shake the market again.

further reading

El Salvador is making history as the first country in the world to use Bitcoin as legal tender (Forbes)

China Takes Crypto Deal, Says “Speculative” Trade “Seriously Violates” Financial Order (Forbes)

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