News from Chinese officials signaling crackdown on Bitcoin mining continues to spread through China’s crypto world. Officials in Sichuan Province will hold a meeting to decide whether to increase regulation on crypto mining. Meanwhile, crypto exchanges are closing down Chinese users from some of their services. An exchange, Binance, translated some website pages from simplified to traditional Chinese, a writing system that most mainland Chinese are unfamiliar with. A Chinese government official said China’s digital yuan could one day join the Ethereum blockchain.
The world of blockchain is moving fast, and nowhere is it moving faster than in China. Here’s what you need to know about China’s block world during the week of May 26th through June 1st.
China’s crypto mining industry is eagerly awaiting how local officials will crack down on bitcoin mining ordered by a meeting of the State Council committee on May 21, led by Vice Prime Minister Liu He.
- Government officials from Sichuan Province will hold a meeting on June 2 to examine the impact of mining on the area’s hydropower consumption before taking regulatory action. (The block)
- The prices of Bitmain’s newest crypto mining rig, the Antminer S19, have fallen 30% from their previous high of $ 12,000. The supply of mining rigs on Alibaba’s second hand marketplace has increased. (Wu blockchain)
- Meanwhile, a May 29 story about a crypto mining facility in the UK that was blown up for illegally using the national power grid has gone viral on China’s Twitter-like Weibo. The associated hashtag has been viewed 210 million times at the time of writing.
- Despite power outages and the announcement of a mining raid, China still accounted for 70% of the global bitcoin hashrate, said crypto research firm Elliptic. The hashrate is a measure of the computing power in the Bitcoin network. (Sina finances, in Chinese) This topic has been viewed over 1 million times on Weibo.
CONTINUE READING: INSIGHTS | A turning point for China crypto?
No more heavily indebted crypto trading?
Crypto trading platforms continue to discontinue service for Chinese users the announcement by the State Council that it would crack down on mining, in particular on trading in derivatives such as open-ended contracts.
- The state-run Chinese news agency Xinhua published an article on May 29 criticizing trading in high-leverage crypto futures. It states that these contracts gave investors the illusion that they were hedging against risk, but that in a volatile market they could “result in the loss of their savings”. (Xinhua)
- Binance has changed the entire language of Simplified Chinese on its website to Traditional Chinese in terms of perpetual contracts and leverage, Chinese journalist Colin Wu reported on May 31. Mainland Chinese people mainly use Simplified Chinese, while people of Hong Kong and Taiwan use Traditional Chinese. Most simplified users can read traditionally. (Wu Blockchain Twitter)
- Bitmart will suspend perpetual contract trading for mainland users starting June 3, the crypto exchange announced on May 31. Perpetual contracts are a type of derivatives trading with no expiration date. (Wu Blockchain Twitter)
- MXC, another Chinese crypto exchange popular for altcoin trading, will suspend margin trading and futures for new users from some regions. Wu said that this will also include China. (Wu Blockchain Twitter)
CONTINUE READING: Crypto mining Armageddon? Fools
Digital yuan on blockchain
Yao Qian, director of the science and technology regulatory bureau of the China Securities Regulatory Commission, said in a speech in late May that China’s digital currency could run on blockchain networks like Ethereum, which would enable better financial inclusion.
Prior to 2018, Yao was involved in the Digital Currency Electronic Payment (DCEP), the project developing the digital yuan, when it was in its early stages when he worked at the People’s Bank of China.
“We can imagine central banks using their BaaS when digital dollars and digital yen run right on blockchain networks like Ethereum and Diem [blockchain as a service] Services to provide central bank digital currencies directly to users without the need for intermediaries. Layered operations can enable the central bank’s digital currency to better leverage groups without bank accounts and achieve financial inclusion. “
—Yao Qian, director of the science and technology regulatory bureau, China Securities Regulatory Commission
Yao also said that the central bank’s motivation for working on the digital yuan was not to monitor people’s financial activity, adding that popular third-party digital payment applications like Alipay and WeChat already “make all transactions transparent in real time” . DCEP is the central bank’s attempt to keep up with the pace of digitization, said Yao. (Sina finances)