China Crypto Roundup (Aug 17- Aug 24): China’s Digital Yuan Tested in Petty Payment, Bitcoin’s Hashrate Takes a Massive Hit After Heavy Floods in Sichuan, More Companies Turn to DCEP
The top stories from the Chinese cryptocurrency sphere this past week includes: China’s digital yuan will be piloted in more cities across the country; China’s Digital Yuan to Test in Petty Payment First; heavy rainfall in China’s Sichuan province forced many mining farms in the region to shut down; Chinese iron ore importers turn to digital yuan to reduce dependence on U.S. dollar.
China launch major expansion of digital currency trials
The roll-out of the Chinese “Digital Yuan” is reported to commence in the coming weeks in a swathe of Chinese cities in the Greater Bay Area, including Hong Kong, Shenzhen, Macau and others, with over 70 million residents.
The seemingly conflicting messages about China’s digital currency marked the latest hiccup in Beijing’s minting of the world’s first sovereign digital currency that has been shrouded in secrecy, with the purpose, function, risks and returns of a digital yuan still unknown.
The application scenarios for China’s digital yuan will be extended to large scenarios such as health care, education, e-commerce services, tourism, cultural consumption after the authorization by the central bank, so as to further improve the payment efficiency and financial service experience.
If the central bank and relevant financial institutions allow it, the digital yuan application might be extended to areas such as medical care, education, e-commerce, tourism, culture, etc. The source also explained that the upcoming digital yuan payment system has all of the characteristics of offline transfers, which means that there is no need to bind it with payment cards issued by banks.
Bitcoin hashrate drops 10-20% due to massive floods in China
As of Tuesday, bitcoin hashrate dropped by 25% due to massive landslides in Sichuan province. The landslides caused by heavy downpour caused the Sichaun province to trigger a Level I response, the highest in its tier four-tier emergency response system.
According to local reports, several large mining facilities in Sichuan have been forced to shut down after suffering massive damages from the flood. Numerous videos that have surfaced on Twitter and other social networks show soaked miners and busted wiring covered with mud in large mining facilities.
This represents a 25% decline in just four days, a significant hit even for a network of Bitcoin’s size. With so many large facilities forced to close down due to the floods, we could see further declines in Bitcoin’s hashrate.
Chinese iron importers favor crypto over US dollars
The Chinese iron ore sector is shifting towards blockchain-powered cross-border platforms to conduct trade deals in the national currency yuan (RMB), rather than the more usual USD transactions, as importers begin to adopt the technology.
Some of the world’s biggest iron miners, most of them located in Europe and Asia, have called for the adoption of blockchain platforms that would enable them to sell their product directly to Chinese companies—without touching the dollar.
As the company now enables Chinese customers to buy their products in small quantities from the company’s Chinese ports, enabling faster and more secure transactions through a blockchain seems like a natural step forward. The company took the blockchain challenge quite seriously, completing an RMB 100 million ($14.44 million) cross-border blockchain-based settlement transaction with Ansteel Group International Economic and Trade Co., Ltd.