CHINA BANS CRYPTO MINING FOR IT'S PEOPLE?

 

Top Chinese Fintech Magazine Lists Reasons Behind China's Crypto Mining Ban

Crypto Daily™1 hour ago

Published on May 30, 2021 12:55 GMT+2edited on May 30, 2021 01:21 GMT+2

CaiXin Magazine, a leading Chinese financial and business media outlet, listed the reasons behind Beijing's decision to ban Bitcoin mining and trading. These were shared by blockchain journalist Colin Wu (@WuBlockchain), who reports exclusively on China's blockchain developments. 

Wu tweeted,

"Caixin magazine, which is most recognized by Chinese financial officials, disclosed some of the reasons why Beijing wants to crack down on Bitcoin mining and crypto: 1. Chinese listed companies do not do their own business, they buy mining machines and build mines."

Earlier this month, China banned financial institutions and payment companies from providing crypto-based services, warning investors against trading digital assets like Bitcoin. Individuals can still hold Cryptocurrency, but exchanges and initial coin offerings have been barred. 

China Bans Crypto Trading And Payment Services

According to the State Council's Financial Stability and Development Committee, China will crackdown on Bitcoin mining and trading activities to fend off financial risks. The crackdown will include illegal activities in the securities markets. 

Vice Premier Liu He chaired a meeting in which the committee stated that they would maintain the stability of stock, bond, and forex markets. Liu is the most senior Chinese official to order the crackdown against bitcoin publicly. It marks a first wherein the state council has stepped in to target crypto mining activities. 

This follows a statement issued by three Chinese industry bodies: the National Internet Finance Association of China, the China Banking Association, and the Payment, and Clearing Association of China, who stated that the speculative trading of crypto infringes on the safety of people's property and is disruptive to the normal economic and financial order. 

According to some estimates, China accounts for 70% of the world's crypto supply, contributing to big business but hardly reflects on the nation's overall economy. As Bitcoin and Ethereum continue to fall, the Chinese government and financial regulators cannot figure out regulatory measures for the crypto industry. 

Reasons From Sources Close To Top Financial Execs

CaiXin's article has feedback from the sources close to the People's Bank of China and other government agencies. The top financial brass has issues because Chinese listed crypto companies do not run their own business. 

They buy mining machines and build mines instead. Beijing is also unhappy with Inner Mongolia's reduction of energy consumption. It's not up to Beijing's standards and hence is at the receiving end of the mining crackdown. 

The crypto-mining economy does not contribute to China's real economy while seizing the production capacity of other chip-making facilities. The crypto sector is a bubble, according to top aides in Beijing. 

There is also a greater risk posed to the older generation, who have less experience in crypto-trading. Regulators want to cancel mining and Bitcoin altogether, but that is not feasible. Caixin also pointed out that the existing regulatory measures are inadequate.

The volatile crypto market has resulted in substantial financial regulations and the entry of many interested participants into the crypto market. While some regulatory authorities believe that crypto is based on hype, there are instances where digital assets have been noted to be a frontier of innovation. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto addiction?

'I lost millions through cryptocurrency addiction'

Published

1 day ago

IMAGE COPYRIGHTGETTY IMAGES

Jake lost millions of pounds trading cryptocurrencies. He does not want his identity known because he is still in treatment at one of the only hospitals in the UK that treats people who are obsessed with gambling on the value of the virtual currency.

Jake first bought Bitcoin - the most popular cryptocurrency - in 2015, but it was not until a big win a few years later that his trading spiralled out of control. 

"I can pinpoint the exact moment it became a problem," he said. "I had been eroding the sum I put aside, but I entered a trade, and I was willing to risk that last amount I had.

"I ended up making back pretty much everything I lost in a single trade. The feeling was one of absolute euphoria."

Jake told BBC Scotland's The Nine that this high, coupled with difficulties in his marriage and personal life, quickly led to an addictive cycle.

His job at that time meant he was in charge of millions of pounds. He said that he soon took to trading money that was not his in the hope of repeating his first success. 

He said: "The first time I took it, I lost it all in about 20 minutes one night. The market moved very rapidly and I liquidated everything.

"It was about 2am. I went back to bed and had to lie down next to my wife. She had no idea what I had been up to."

Jake had been facing criminal charges for embezzlement but was able to pay back £1.5m to his employer with the help of his family and is now in treatment for his addiction.

What is cryptocurrency? 

IMAGE COPYRIGHTGETTY IMAGES

Cryptocurrencies are digital money that is not issued by a bank. You can trade and invest these currencies like any other - and there are virtually no barriers to entry. The absence of regulation means the market can go up incredibly fast. 

During the lockdown, the total value of all cryptocurrencies increased from about £175bn to more than £1.75tn. 

Figures from the UK's financial watchdog show that hundreds of thousands of people in the UK hold these digital currencies. 

But since the start of May, the market reached its highest-ever level and lost more than £1tn just a few weeks later. 

With something this volatile, when you win, you win big. When you lose, you hit rock bottom.