Over the past few months, the Chinese government has been clamping down on the cryptocurrency industry. Initial pressure was placed on exchanges and companies conducting ICOs, and is now spreading to mining operations within the country. If and when mining will be outlawed within Chinese territory has yet to be confirmed, but recent indications show that the groundwork for such a move is already taking place.
Rumors of a Chinese crypto mining ban have been circulating of late, and may have reached their peak in recent days. As reported by Finance Magnates yesterday, China has ordered crypto miners to make an “orderly exit.” Miners operating within the country are not taking these statements lightly, and are already making contingency plans, in an effort to avoid being left behind in the increasingly likely event of an imminent mining ban. Some mining companies have already shut down their operations, and others have moved to alternative locations around the world.
All Eyes on Canada
Bitmain Technologies has been highly active in pursuing an entry to Quebec, a Canadian province that is currently in an energy surplus. The growing number of companies setting up in the area can be attributed to fact that the energy is relatively inexpensive and overflowing. Earlier today, Bitmain spokesman Nishant Sharma said that the company is in contact with Canadian energy authorities, and that the operations could be divided into multiple locations, including Switzerland. In recent months, Bitmain has been expanding its business reach, creating partnerships and raising funds from intrigued investors.
Canadian public utility company Hydro Quebec has been attempting to lure various mining companies to the area, on the grounds of low cost energy supply, and lenient government policies pertaining to crypto mining practices. Director of Business Development, David Vincent, commented on the recent efforts to bring in additional companies: “Of the world’s top five largest blockchain players, we have at least three or four.”
In September of last year, China made a splash in the cryptocurrency space when the country announced that it will ban all ICOs. The reasoning behind the ban was to protect investors from scams and the high risk associated with ICOs, which can potentially lead to devastating losses. The decision left many crypto enthusiasts wondering about the effects on market prices. Shortly thereafter, the government also announced that it will shut down operations of all crypto exchanges. The move created a negative sentiment in the country, due to the massive size of the Chinese investor field, and the consequent outflow of funds from the market.
China is a major player in the crypto space, and its influence on the industry cannot be overstated, both due to its citizens’ high involvement in the field, as well as the sheer number of investors that the country infuses into the market. It is therefore important to understand the moves made by China’s government and to assess the direction that the country will be taking in the future and its influence on the global blockchain community.