China is ramping up its anti-cryptocurrency measures to prevent people in the country from trading cryptocurrencies using mobile apps and online platforms that offer exchange services.
The Chinese government has been working hard to discourage the use of cryptocurrencies such as bitcoin and ethereum and the latest efforts have been aimed at discouraging cryptocurrency mining. This is a huge issue considering that China takes the lead when it comes to bitcoin mining. China’s authorities have argued against bitcoin mining due to high electricity consumption in the mining process. However, the crackdown is not just limited to high electricity consumption.
“If you regulate the use of bitcoin in terms of acceptance as a mean of payment, it is a way to limit its criminal use,” stated Olivier Scaillet, a professor at the University of Geneva.
This explains the Chinese government’s motives behind the use of bitcoin and altcoins is a means of handling the larger issue of illegal activities such as money laundering and fraud. The high electricity consumption by miners is just one of the additional issues that further contribute to China’s decision to ban cryptocurrencies and cryptocurrency mining.
China’s central bank has been expressing concerns about the risks of using cryptocurrencies, especially where there is no centralized regulation. The Chinese authorities argue that cryptocurrencies such as bitcoin are attractive especially to illegal activities such as money laundering and fraud. So far the authorities have already cracked down on various altcoins such as Ticcoin and Onecoin who’s initial coin offerings (ICOs) were reportedly used to raise revenue illegally. They were described as Ponzi schemes and eventually the Chinese government also banned ICOs.
China is however not against cryptocurrency mining and trading despite the ban on cryptocurrency mining and trading. The main problem is illegal activities due to the lack of proper regulation and the country plans to use its own cryptocurrency which will be characterized by more regulation to avoid fraud. As for energy consumptions, there have been talks about using renewable energy or even making changes to the mining process so that it will not be so energy intensive.