China’s first major crypto statute came in 2013, when the government recognized bitcoin as virtual property but banned it as a medium of transaction.
As it currently stands, Chinese citizens aren’t being forced to surrender their assets to the state.
By upping the enforcement around speculative crypto trading and mining, it’s the Chinese State Council’s hope the nation’s economy will be better insulated from the wild volatility of the crypto market.
While China has taken a more aggressive stance against bitcoin and crypto in general in recent months, some of the regulations being mentioned could be subverted in the same ways they always have been.
While the exodus of miners may disrupt the crypto market in the short term, in the long term, increased decentralization promises to make the Bitcoin network less vulnerable to the rules and regulations of any single country.
The news paired with the fact that 4.5% of all mining takes place in Iran caused crypto markets to shift, which is far from desirable in an already volatile space.
While Iran’s volume of mining pales in comparison to that of China’s, the point remains – risks and complications of mining will be less prevalent if the miners themselves are more spread out.
The state benefits from some of the world’s lowest energy prices, a growing share of renewable energy sources and a deregulated power grid.
As it stands, North American miners use a wider range of energy sources compared to Asian-Pacific miners and tend to rely less on burning fossil fuels like coal.
North America also has more incentives to supply miners with renewable forms of energy, both in the free market and via government regulation because the mining industry’s exorbitant use of energy continues garnering public scrutiny in the United States.
Unlike with the Chinese government, North American regulations will not be an “all or nothing” affair.
Mining will likely be eased into using alternative energy sources over a multi-year span, a more sustainable tactic for progress than threats of an outright ban.
But these are widely considered short-term obstacles in a long-term game – ones that have the power to strengthen cryptocurrencies like bitcoin as much as they can hurt them.
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