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China Doubles Down on Cryptos’ “No Real Value” Position

China is set to establish a normal working mechanism to maintain a high-pressure situation in its continued effort to combat cryptocurrency-related transactions, local media has reported.

The People’s Bank of China (PBoC) Deputy Director of the Financial Consumer Rights Protection Bureau, Yin Youping, made the disclosure during a press briefing where he stressed the active state of China’s ongoing crackdown on cryptocurrency activities.

Youping sounded a reminder to citizens that Bitcoin and other cryptocurrencies are not legal tender and that they have “no real value support” as he reiterates China’s anti-crypto position.  

His comment is coming after a comment by the High Court of the eastern province of Shandong in which the Chinese court said that “the behavior of investing or trading cryptocurrency is not protected by law.” 

The court, citing a 24 December 2017 case involving a CNY70,000 investment, referenced several notices and announcements issued by Chinese civil banks and other departments warning that cryptocurrencies are not issued by the country’s currency issuing authority and do “not have the legal and mandatory monetary attributes” of a currency. 

 

China’s crypto crackdown effect telling 

China’s crackdown on crypto-related activities has had a great toll on its mining industry and the crypto space as a whole. Some industry insiders say the move has given the mining industry outside of China the opportunity to grow as reflected in the earnings and production updates from some companies. 

From Kazakhstan’s global share rising from 1.4% to 8.6% – almost six-fold increase – to slashing competition for North American miners, the crusade to prevent Chinese from mining or holding cryptocurrencies is gradually changing the landscape and somewhat addressing the perceived centralized dominance of China in the space. 

The mining difficulty level has since changed according to Luxor Mining – moved by a 13% increase this month from the prior and recording the third straight positive adjustment in a row – to indicate that there’s been more more mining operations or several inactive miners in the last two months have powered on. Luxor Mining believes that a more explosive Q3 and Q4 should be expected for mining players as more machines come online with time.

China’s ban on financial institutions and payment companies to prevent crypto-related services has also reportedly benefited the Indian startup ecosystem where new projects are being launched for their better growth prospects and the stability in government policies.

Aside from the mass exodus of crypto miners from China to other parts of the world, the manufacturing of Bitcoin mining chips and machines may also be up for contest as moving from China to the West. 

Blockchain technologies company, Blockstream, seeks to  acquire the intellectual property of Spondoolies, an Israeli Bitcoin mining hardware manufacturer specializing in the production of application-specific integrated circuits (ASICs), to launch an enterprise-grade miner.

They announced raising $210 million which will go towards “accelerating our Bitcoin mining efforts and the acquisition of Spondoolies to launch an enterprise-grade miner,” they stated about the almost-impossible task which the likes of Bitmain, Canaan and Whatsminer have struggled to outdo one another in terms of competitive edge. 

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