Bitcoin took investors on another rollercoaster ride over the weekend after a major Chinese regulator announced a crackdown on mining, a new tactic in the country’s ongoing fight against cryptocurrency.
The government “will crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to society,” said the statement, which was issued by the council’s financial stability and development committee. of state, the cabinet of the country. equivalent. The committee is chaired by Vice Premier Liu He, who acts as President Xi Jinping’s top representative on economic and financial affairs.
Reading: Will likely ban all bitcoin soon
“The wording of the statement did not leave much room for cryptocurrency mining,” li yi, senior research fellow at the shanghai academy of social sciences, told the south china morning post. “When all mining activities in China are banned, it will be a turning point for the fate of bitcoin, as a large part of its processing power will be removed.”
The Chinese government is not only concerned about financial stability. A commentary on Xinhua News, the communist party’s official media outlet, elaborated on the government’s stance, expressing concerns about bitcoin’s role in money laundering, drug trafficking, and smuggling. he also mentioned bitcoin’s wasteful energy usage. last week, china warned financial institutions not to engage in crypto transactions or related services.
China’s hardening stance towards bitcoin comes as the most valuable cryptocurrency comes under increasing scrutiny for its huge carbon footprint. Less than two weeks ago, Elon Musk announced that Tesla would no longer accept bitcoin to buy one of its electric vehicles. when tesla’s bitcoin buy policy was announced, a model 3’s bitcoin cost produced about 400 metric tons of carbon dioxide, compared to just 8.85 metric tons to make and drive the car over its lifetime . By the time Musk canceled the policy, a decision apparently influenced by ARS coverage, the Model 3’s Bitcoin carbon footprint had grown to more than 500 metric tons. “We are concerned about the rapid increase in the use of fossil fuels for bitcoin mining and transactions,” he wrote in a tweet.
The bitcoin network requires an astonishing amount of energy. today, it uses as much energy as the netherlands to maintain normal operations. That burden should be particularly obvious to the Chinese government, as a recent Nature Communications paper estimated that 75 percent of all bitcoin mining occurs in China.
China’s warning to bitcoin miners is sure to drive many operations out of the country. At least one bitcoin watcher said he anticipates miners kicked out of China will set up operations in Mongolia, Kazakhstan and Afghanistan.
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