China Orders “Stop Crypto Services”

China Orders “Stop Crypto Services”
  • Cryptocurrency prices have fluctuated wildly in recent weeks as China intensifies a crackdown on trending and mining operations.
  • On June 21 Bitcoin slumped more than 10% after Beijing pulled the plug on the massive mines of Sichuan province.
  • China’s regulatory assault on the digital currency has Crypto watches reaching for answers as to why Beijing is clamping down now.

Why the Crypto crackdown in China?

  • Beijing crabs’ control with the financial system now increasingly in its sights
  • Bitcoin is the world’s largest digital currency and cannot be easily traced by the country’s Central Bank making them difficult to regulate.
  • Chinese authorities outlawed trading this month to prevent and control financial risks.

Analysts say China fears the proliferation of illicit investment and fundraising. 

What are China’s digital currency plans?

  • China launched tests for a digital Yuan in March.
  • It aims to allow Beijing to conduct transactions in its currency around the world.
  • It is about making the Yuvan more internationally available whilst maintaining  complete control
  • At this point, its focus is that it cannot easily be seized, censored, and debased.

 Bitcoins are created and moved around not by a central bank or financial institution. Bitcoin operates entirely outside of China’s Central Bank or communist party control. China has declared War on Crypto mining.

To help the environment, Bitcoin mining is a process where people can run powerful computers to solve complex math problems that validate Bitcoin transactions. They are rewarded with Bitcoins. This is how new Bitcoins are created and the computers doing that requires a huge amount of energy.

More than entire countries like Argentina, China makes up about 65% of all Bitcoin mining globally. Chinese region of inner Mongolia alone” accounts for about 8% due to its cheap energy”. This is why Inner Mongolia is banning Bitcoin mining and banning any new digital coin projects.

Furthermore, China is moving rapidly towards a national digital currency called the e-Chinese-Yuan. China’s Central Bank began testing it in four cities last year and now it’s being brought to bigger cities like Shanghai and Beijing.

China’s digital currency is like the anti-Bitcoin because Bitcoin uses blockchain Technology that keeps transactions anonymous. Chinese digital currency does not do that.

Chinese authorities can see every transaction made with the digital Yuan. So Chinese digital currency is not a cryptocurrency.

The digital yuan could give the Chinese government more power to monitor finance flows because a digital currency system can record every transaction.

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A Project Engineer by profession, a writer by passion. Especially into the critics and skeptics on cryptocurrency. His fascination towards the crypto world and his personal experience on it has made him a writer with a taste.