China’s cryptocurrency ecosystem is currently in the throes of turmoil. The lawmakers in the country are still planning to continue a crackdown on cryptocurrency trading and speculation. In fact, the People’s Bank of China [PBoC] said it will keep pressure on the market citing “illicit activities” as a reason behind its move while simultaneously lauding its effort on the aggressive crackdown this year.
In an official statement, the central bank of the country that it aims to counter potential financial risks and reduce the number of high-risk financial platforms in key provinces. The People’s Bank of China also reemphasized that its monetary policy will be flexible, targeted, reasonable, and appropriate and pledged to enforce a good “cross-cyclical” policy design.
The bank also mentioned that it is seeking to expedite its work to formulate a financial stability law. This is in line with Deputy Governor Liu Guiping’s previous proposal revealed in March. The latest development comes just a day after the Chinese officials met to discuss work priorities for the second half of 2021.
China’s crackdown, a windfall to global Bitcoin mining market
Chinese lawmakers had earlier launched an intense crackdown on crypto trading and mining immediately after Bitcoin’s tremendous bull run above $60K that led several altcoins to post massive gains and shoot up to levels never seen before. This was enough to amplify authorities’ concerns over risks of fraud, money laundering, including excessive energy usage. The policymakers of China soon forced a string of regulatory actions attacking monopolistic behavior at well-known online payment firms such as Ant Group Co. over the last couple of months
Furthermore, the series of clampdowns had a damaging effect on the mining industry in China. According to various reports, at least eight China-based Bitcoin mining firms are now eyeing to relocate operations to Paraguay. This comes just a few weeks after Juanjo Benítez Rickmann, who happens to be the CEO of the Paraguay-headquartered mining platform Digital Assets S.A. acted as an advisor to a recent Bitcoin bill that seeks to regulate miners in the South American country and to draw foreign businesses.