No China mining. Timeline of events and consequences for the industry

The story of how the country’s authorities continued to impose bans, and the mining devices changed in price, and businesses began to migrate

Month before, the biggest Asian country released the ban to use electricity for crypto issues in all regions of the country. So, such actions there is now completely illegal.

The first problems began almost 3 months ago. Mining restrictions were imposed by Inner Mongolia. It was the biggest region where miners worked. The bitcoin rate immediately fell by almost 9%. Market participants expected the temporality of the trend and were in no hurry to sound the alarm. Further, the baton of bans was picked up in some other key provinces a little later.

Regulatory policy

At the middle of May, government issued a formal statement. They pointed the request “to stop any activities in transactions with virtual currency.” The message spoke of the need for financial institutions to strengthen social responsibility and stop the use of crypto in the context of the pricing of goods and services. Any crypto transactions should be stopped by the bank’s decision.

The ban is related to any trading and mining activities. At the end of that month, the position was confirmed by the biggest country’s authorities. The head of the institution called for action, including the BTC mining. However, then the chances of not having a complete ban remained.

The end of the past month showed the final and irrevocable ban there. PBC gave clear instructions to the largest banks and payment systems to block any activities related to cryptos.

The country’s regulator considers operations with cryptocurrencies to be risky. The statement points to the danger of illegal withdrawals of money, money laundering, the risk of losing savings. Now financial industry there must block any crypto trading operations, including p2p and OTC operations, as a matter of priority. The regulator also instructed all the listed banks to “use new tech resources” to speed up the tracking of such financial transactions.

Institutions are also required to comply with regulatory rules due to new regulation documents. The representatives of financial institutions agreed with the restrictions and pledged to implement them in full.

The results of what happened for the crypto world

The decision almost crushed the mining world. Lots of businesses was presented there legally, and they refused to go in shadows, but left the country. Almost all of them do that to the moment. However, in recent years, this country has begun to lose ground in the mining industry. The country’s total share in industry has dropped from 3/4 of the global volume to less than 1/2 in two years.

The changes in country’s policy is related to the digital yuan launch. The confirmation is outlined in a document released in the middle of July. The decisions of China led to the global migration of mining companies, who now ended up in North America, Europe, and the Post-Soviet countries. The second important result of the situation was the fall in prices for mining equipment. Some of the manufacturers was even forced to stop selling it.

The problems pushed negative dynamics in the whole crypto market, intensified the correction, and stopped companies. But there is a positive side.

First, more renewable electricity will now be used. The reason is the China’s focus on thermal power plants. In addition, the mining market goes to be presented in the whole world. Crypto mining equipment is located almost everywhere now. This means that it is unlikely that more than 1/2 of the hashrate of the first cryptocurrency will be concentrated in one country, as it was before.

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