China takes its war on cryptocurrencies a step further. The Asian power has now included cryptocurrency mining in its list of “negative” industrial activities. In practice, this means that investment in that sector may be limited or even prohibited altogether.
China has included cryptocurrency mining on its list of “negative” activities, implying that it may limit or even prohibit investment in this activity
This veto affects domestic and foreigners alike. Investors in cryptocurrency mining are from now on obliged to apply for a permit from the Chinese authorities. In view of the government’s crackdown on digital assets, it is unlikely to grant licenses for this activity. Thus, mining and trading cryptos will become virtually impossible in the country.
At the end of September, the People’s Bank of China declared all digital assets and any kind of transactions with cryptocurrencies illegal in the country. For the Asian government this is a “serious risk to the security of citizens’ assets”.
A few months earlier, the same institution announced that would stop accepting payments in cryptos for not considering them “real currencies”. At the same time, he urged the country’s banks to avoid cryptocurrencies because of their volatility and the speculation surrounding these assets.
China has been among the most booming cryptocurrency markets in the world. Until 2017, when it began to curb their use, the Asian country concentrated up to 90% of global operations carried out with them. In fact, fluctuations there are immediately felt in the global price of cryptocurrencies. Shortly after the Chinese authorities’ decision to ban cryptocurrencies was made public, the value of Bitcoin plummeted by more than $2,000.
In May, when the country stopped accepting these digital assets, the value of the Bitcoin fell below $34,000 for the first time in three months. It is to be expected that this new setback to cryptocurrencies in China will be felt in the value of assets.