CHINA and CRYPTO
Just like everything else, most crypto is actually made in china. The country has been at the forefront of crypto mining since its inception. Part of that is because the inner Mongolia region has one of the cheapest industrial electricity in the world. Still, the main factor is that technologies like graphics cards, cooling systems, and ASIC miners are designed and developed in China, so it is way cheaper in china. One of the biggest players of the industry in China is BitMain, the maker of ant miners, the world’s largest ASIC miner developer and manufacturer, and one of the largest miners.
China was also one of the first countries to capitalize on the cryptocurrency industry. But quite surprisingly, right when everything was in the hype in crypto, China announced a ban on crypto trading, mining, and essentially its existence in the Chinese economy. Why do you think China is willing to let the profits go?
The crypto rise
China has the largest population and second-largest economy in the world. Many new industries have created a new middle class that is looking for a quick way up the ladder of wealth, and crypto sure looks sexy to them. Maybe that was one reason why crypto had a ripple effect in China, but nobody can say for sure. But one thing is crystal clear: China had a big portion of the rise of crypto, whether it is a large market or community or advancement of mining and technology.
The crypto influence
The Chinese communist party likes to control every single factor of their citizen’s lives; they have done some pretty weird stuff. For example, rumor has it used to track women’s menstrual cycle on a blackboard, publicly, for everyone to see in the office. All to enforce its one-child policy. From censorship to media control, the Chinese communist party is not interested in Democratisation, and with crypto, they can’t control anything. That’s the power of a decentralized network.
The crypto ban
China banned all crypto transactions, mining, and any activities associated with crypto in the last months. Banks are prohibited from accepting crypto-related finances, profits, or deposits. People influential in the financial industry and cryptocurrencies have had their accounts removed on the Chinese form of Twitter, Weibo, and WeChat. China claims that these steps have taken place because crypto has shown to be too volatile and effectively, the government is worried about its citizens’ finances safety. Additionally, they have claimed that people like Elon Musk have too much power in this industry. But this ban came right after the issuance of the digital yuan, the world’s first government-issued digital currency.
The digital yuan, also called e-RMB, is the first digital and official government-issued currency globally. The Chinese central bank issues it, and like any other cryptocurrency, it’s stored in a wallet and sent using the wallet address. Not much else is known about the digital yuan outside china yet. But with officially disclosed information from the central bank, it isn’t straightforward, and they have been working on it for a long time. It’s also worth noting that foreigners are allowed to hold a wallet.
China has been a major player in the crypto industry since the beginning. And their issuance of the digital yuan and its secrecy confirm that they understand the future of finance and want to control it and have prepared for it. While its crypto ban will not and can not stop people from using other cryptocurrencies, at least for their trades outside China, it’s hurt crypto valuations a bit since its announcement and enforcement.
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