The Chinese government has no intention of lifting the ban on cryptocurrency trading and mining that was introduced in September 2021.
Virtual currencies do not have the same legal status as fiat currencies; they are not legal tender and cannot be used as currency in the market. The People’s Bank of China (PBOC) stated in a press release that the Central Bank will severely punish illegal activities involving digital assets.
Chinese authorities have cracked down on cryptocurrencies, allegedly due to the high level of speculative activity inherent in the virtual currency market, whose prices are highly volatile. Stablecoins have been rejected by officials because they are used for:
- Money laundering;
- Implementation of fraudulent investment schemes;
- Making illegal cross-border transfers;
- Payment for illegal goods and services.
China banned virtual currencies, viewing them as a threat to the country’s financial security, but law enforcement agencies have failed to put a stop to digital asset mining. This is evidenced by the fact that China’s share of the Bitcoin blockchain hashrate increased Up to 21,11%, putting China ahead of Russia in terms of cryptocurrency mining capacity. Currently, Russians control only 4,66% of the BTC network’s computing power.
Bitcoin Blockchain Hashrate Shares by Country (According to The Chain Bulletin)