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Bitcoin miners should probably start thinking about leaving China sooner than later. Reuters said Friday that two provinces, Qinghai and Xinjiang, banned cryptocurrency mining this week due to the country’s broader crackdown on the practice.
Reuters said that the Ministry of Industry and Information Technology office in Qinghai “ordered a ban on new cryptomining projects in the province, and told existing ones to shut down” on Wednesday. A similar order was reportedly issued by the Development & Reform Commission of Xinjiang’s Changji Hui Prefecture.
Neither announcement was a surprise. The Financial Stability and Development Committee of China’s State Council announced on May 21 that it would “crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society.” These provinces are merely enforcing that decision.
That official crackdown followed other efforts to impede cryptocurrency mining in China, too, including the Inner Mongolia Development and Reform Commission’s establishment of a hotline province residents could use to report suspected miners. It’s not like the Chinese government has played coy about its opinion on the matter.
Yet each successive move to suppress Bitcoin mining in China has had a noticeable impact on the cryptocurrency’s value because, according to Reuters, the country is responsible for mining roughly half of the world’s bitcoin. It makes sense for stricter regulations on that supply to negatively affect the world’s leading crypto coin.
These latest changes were no different. Coindesk’s price index shows that Bitcoin’s value plummeted late Tuesday and early Wednesday as news broke about these new bans in Qinghai and Xinjiang. It has since recovered, but the price per coin has still fallen by roughly $18,000 month-over-month and is near a three-month low.
Bitcoin miners affected by these restrictions might want to consider a move to El Salvador. The country has embraced the cryptocurrency by accepting it as legal tender, considering a move to extend citizenship to anyone who owns three bitcoin, and, of course, planning to establish volcano-powered mining operations.
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