Chinese authorities are taking stringent steps to impose a regulatory ban on cryptocurrency. The government has banned cryptocurrency transactions in the country and imposed a nationwide crackdown on the mining of cryptocurrencies. Huobi Exchange, the popular exchange forum of China offshore, has barred new users from registering on the platform with Chinese phone numbers. Huobi is also working on removing the accounts of Mainland China users.
Henri Arslanian, the cryptocurrency partner and leader at PwC, tweeted that the government of China has left no room for discussion regarding the ban on cryptocurrency. This time, China has imposed offshore transactions in cryptocurrency that used to be facilitated by the exchange forum of Huobi. The government has involved The People’s Bank of China, other financial institutions, security forces, the police, cyber forces, as well as the Supreme Court to ensure that Chinese citizens comply with the cryptocurrency ban.
The regulators have banned cryptocurrency and cracked down on stablecoins like Tether as stablecoins are not fiat currencies. Owing to the ban imposed by the government of China, the price of Bitcoin has plummeted by almost 8.9% to around US$40,700. However, the price rallied around over the weekend to US$43,000.
To ensure strict compliance with the cryptocurrency ban, the officials of China are investigating abnormal usage of electric power, recalling suspicious loans, and eliminating preferential treatment of taxes to do away with mining operations. Several Bitcoin miners have moved out of the country, leading to a dramatic drop in the hash rate from mid-May to July. However, there has been a slight recovery in the hash rate, indicating that the miners may have returned to China or resumed operations elsewhere. As of now, the hash rate is quite steady, which means that Bitcoin mining operations are in full swing.
The government of China is yet to enact regulations regarding the ownership of cryptocurrency. It is not yet illegal to own cryptocurrency in China, although engaging in cryptocurrency transactions is illegal.
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