Whatever the impetus, the government's growing hostility toward crypto-related endeavors is apparent. "Part of this is to ensure the adoption of China's central bank digital currency, and part of this is most probably to ensure financial surveillance activities are able to see all economic activity." "China's government is doing everything they can to ensure that bitcoin and other cryptocurrencies disappear from the Chinese financial systems and economy," speculated Thiel. Making it harder to transact in rival cryptocurrencies could be part of a larger plan to ensure adoption of this new central bank digital currency, according to Fred Thiel, CEO of Marathon Digital Holdings and a member of the Bitcoin Mining Council. The country is testing its own central bank digital currency, which could grant the government greater power to track spending in real-time.
There's looming competition from the digital yuan, as well.
In November, government spokesperson Meng Wei slammed bitcoin mining, calling it an "extremely harmful" practice and vowing stricter enforcement measures. The country has been dealing with its worst energy shortage in a decade, resulting in power cuts.īeijing has also made it clear that crypto mining stands in the way of its aggressive climate targets, as it pushes to achieve carbon neutrality by 2060. Some miners – especially smaller-scale operators who didn't have the resources or the connections to migrate abroad – figured a lot of the crypto talk by the government was bravado, so they powered down, laid low for a few weeks, and then came back online, taking a few extra precautions when they did.īut this crypto crackdown appears to be different for a few big reasons.įor one, China is short on power, a resource vital to the process of bitcoin mining. The country's announcement this spring that it would be cracking down on crypto mining dovetailed with the centennial of the founding of the Chinese Communist Party, a time when there was pressure on lawmakers to show strength. Most of those addresses, according to the report, are in the provinces of Guangdong, Jiangsu, Zhejiang, and Shandong.Ĭrypto mining has survived in China, in part, because lot of miners weren't sure whether Beijing was actually serious about the ban.Ĭhina has repeatedly lashed out against digital currencies, but each time, the sting wore off, and the rules eventually softened. In a November report, the research group estimated that there are an average of 109,000 active crypto mining IP addresses in China on a daily basis. Data from Chinese cybersecurity company Qihoo 360 shows that underground crypto mining appears to be alive and well in China.
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