The cryptocurrency world was shocked after China issued a new warning on cryptocurrencies.
The Chinese government is back in the news in the cryptocurrency world by issuing a new warning. The government this time has warned state-owned enterprises not to engage in cryptocurrency mining. According to BNN Bloomberg, the authorities threatened to impose more aggressive measures on companies involved in the Bitcoin (BTC) mining business.
A meeting was held last week to reinforce their latest announcement to ban cryptocurrency-related activities in the Asian country. However, Meng Wei, spokesperson for the nation's economic planning chief, clarified that the measure extends to private companies as well.
Likewise, China's Central Commission for Discipline Inspection recently expelled Xiao Yi, a former official in Jiangxi province, for various infractions such as supporting digital asset mining. The official was accused of abusing his power to engage in these activities that the Chinese government now considers "illegal activities."
Beijing Issued a New Warning on the Cryptocurrencies
China has again cracked down on bitcoin miners this year, blaming them for the chaos in the energy sector as the government struggles to meet its carbon-neutral targets in the medium term.
Concerns about the country's energy supply for the upcoming winter season were one of the reasons for the intensification of the crackdown on miners in September.
Chinese government officials have persecuted those who try to disguise themselves as data researchers and storage facilities to stay in the cryptocurrency business.
Meanwhile, a study by the UK's Cambridge Center for Alternative Finance revealed that the United States is now a very strong country in the Bitcoin (BTC) mining industry, outperforming China. According to Reuters, the figures are not surprising, considering the recent Chinese government crackdown on the cryptocurrency sector.
The study confirms that miners are shifting their business to North America, as the United States accounted for 35.4% of the global production rate at the end of August, followed by Kazakhstan and Russia.
The next country in the ranking is Canada with 9.55%, followed by Ireland with 4.68%, Malaysia with 4.59%, Germany with 4.48% global hash share, Iran with 3, 11%, and Norway with 0.58%. However, the study highlighted that countries like Germany and Ireland are included in the list because miners often rely on the use of virtual private networks (VPNs).
Chinese Mining Industry Migrates After New Warnings
Chinese miners are relocating their operations to Central Asian countries due to their crypto-mining friendly environment in terms of regulatory frameworks.
Remember that the hash rate is the unit of measurement for the processing power of the Bitcoin network. The Bitcoin network must do intensive math operations for security reasons. When the network reaches a hash rate of 10 TH/s it means that it can do 10 trillion calculations per second.
China's current hash rate has plummeted to zero in July from 44% in May to 75% in 2019, according to the Cambridge Center for Alternative Finance.
According to the People’s Bank of China (PBoC), all companies offering token issuance, trading, derivatives, and order matching for digital assets are prohibited.
This new warning from China on cryptocurrencies comes just when bitcoin is not going through its best moment. Many cryptocurrency traders have taken this new warning from the Beijing government with great caution.