Bitcoin is under attack in China – and its de-Chinafication seems to be near completion.
In an episode of “The Breakdown” podcast, Coindesk author Nathaniel Whitmore (@NLW) dissects the prospects of the cryptocurrency in the midst of one of the world’s biggest national crypto crackdown.
As context, the Central Bank of China has called for a meeting of the nation’s largest banks to re-emphasize the need to suppress crypto transactions in bank accounts. This move has been seen widely as another round of China’s tightening noose around the future of bitcoin.
Sichuan adds to list of provinces banning crypto
Of late, Sichuan was added to the list of Chinese provinces to ban crypto mining. Critics cite their confusion on the blanket Chinese ban due to environmental reasons since Sichuan crypto miners use hydropower energy. Analysts believe that there is more to the Chinese ban than meets the eye, and that we might be seeing the complete de-Chinafication of bitcoin in the coming months.
In his podcast, NLW remarked that China has made successive trash talk against the crypto market on the same day. It began with the third largest bank in China – The Agricultural Bank of China – restating its previous policy of avoiding business with crypto firms. This tweet was seconded by several analysts who re-tweeted the declaration that any banking institution proven to show “relevant behaviors” related to bitcoin faces immediate suspension and isolation within the community.
These tweets had since been deleted. However, upon further research, it appears that the tweet coincided with a prominent meeting convened by the Central Bank of China with the nation’s largest banks, with the addition of Alipay. Based on a statement from the central bank, banks are directed to “comprehensively investigate and identify virtual currency exchanges” promptly, and must steadfastly avoid participating in crypto-currency dealings. Moreover, they are advised to be resolute in stopping all hype activities related to virtual currencies.
Bitcoin ban nearing completion?
NLW commented that while similar policy pronouncements had been made by China in 2014 and 2017, China’s aggressive position versus bitcoin has escalated this year, particularly with the mining blanket ban.
After the Vice Premier’s announcement of a mining ban, bitcoin mining has been halted in four provinces, three of which are coal-powered and one (Sichuan) running on hydropower. Since the country is going after even provinces with sustainable power demonstrates that the ban is not premised on environmental protection.
NLW further commented that it is highly unlikely that China’s posturing as a climate change champion in light of the mining ban is genuine. What is perhaps clearer is that China intends to ban bitcoin because of bitcoin – and not because of the environment. For this reason, the crypto community has concrete reasons to worry.
Whatever the case may be, the complete bitcoin ban in China is a long time coming. In a tweet, Ciarán Murray said China’s actions versus bitcoin is like “an eight-year-longeight-year long bandaid rip, but it’s almost off.” Bitcoin runs counter to China’s pursuit of a closed monetary system that is under state control and regulation.
What the future holds for bitcoin, should a complete ban be implemented, remains to be seen.
