China has declared an all-out war with Bitcoin, including banning cryptocurrency transactions and cracking down on Bitcoin mining activities.
The State Council of China held a meeting of the Financial Stability Development Committee, chaired by Deputy Prime Minister Liu Hee, on the night of the 21st, and said, "By striking bitcoin mining and trading activities, we must firmly prevent the transfer of individual risks to the entire society."
Of particular note in the announcement, led by Deputy Prime Minister Liu, who is known as President Xi Jinping's economic book, is the mention of the mining ban.
This is because this is the first time that the central government, the State Council, has clearly clarified the principle of limiting bitcoin mining.
The central government of China has completely banned the issuance and trading of virtual currency since September 2017, but has since taken a somewhat ambiguous position on bitcoin mining.
However, as the State Council proposes'Bitcoin Mining Strike' as a national unification principle, it is highly likely that the crackdown on cryptocurrency mining sites currently underway in the Neimong Autonomous Region will expand across China.
Lii, a researcher at the Shanghai Academy of Social Sciences, told South China Morning Post (SCMP) that "there is a high possibility that related institutions will come up with specific measures to ban bitcoin mining in the near future."
Some of the relevant movements are already appearing.
Ava State Electric Power Corporation in Sichuan Province has started restricting transmission to all'big data centers' in the building from the 16th due to power shortages, reported by local media, Huaxiashibo.
Bitcoin miners that have installed a large number of servers often report their industry as a'big data center' to the authorities, but the interruption of power supply to bitcoin miners is like a'death sentence'.
It is not an exaggeration to say that large Chinese mining farms are in fact supporting the world's bitcoin trading.There are also observations that the exit of the Chinese bitcoin mining site could have a relatively big impact on the major cryptocurrency ecosystems including bitcoin in the future.
According to the Alternative Finance Center (CCAF) at the University of Cambridge in the UK, 65.08% of the world's bitcoin mining was done in China as of April last year.
Bitcoin mining sites in China are concentrated in Xinjiang Uighur Autonomous Region, Neimong Autonomous Region and Sichuan Province, where the climate is cool and electricity bills are relatively cheap.
"If mining activities are banned in China (bitcoin transactions), a significant portion of the processing power will be lost," said Lee. "Bitcoin's destiny could be a turning point."