Regional Chinese governments continue to crack down on crypto mining after a top government agency held high-level talks of mining crackdown in May. This week, local governments in Qinghai, Yunnan, and Xinjiang followed Inner Mongolia and Sichuan to issue new crackdown policies. Former Chinese central bank governor Zhou Xiaochuan sounded pessimistic about cryptocurrency’s future in payments. And more cities began to use digital yuan—including a first-ever digital yuan/blockchain tie-up.
The world of blockchain moves fast, and nowhere does it move faster than China. Here’s what you need to know about China’s block-world in the week of June 9 to June 15.
Crypto mining shutdown continues
- Officials in China’s Qinghai province began to crack down on crypto mining, following regional governments in Sichuan and Inner Mongolia. The province’s Industry and Information Technology Department announced on June 9 a series of regulations, including closing all current mining operations, stopping the issuance of permits to new operations, and cutting electricity and other support to mining companies. Mining activities in Qinghai are relatively small compared to other provinces. (Sina Finance, in Chinese)
- On June 9, regional officials in China’s far-western province of Xinjiang ordered all cryptocurrency mining companies in the Zhundong Economic Technological Development Park to shut down by 2:00 p.m. that day. The park is home to some of China’s largest bitcoin mining facilities, due to abundant fossil fuel energy. (The Block)
- Yunnan province will examine all cryptocurrency mining operations in the province by the end of June, hunting for violations including the use of unlicensed electricity, officials told local media. The region’s energy bureau confirmed a rumor to a local news outlet on June 12. Mining companies found using electricity without proper authorization will be ordered to shut down. (Science and Technology Innovation Express News, in Chinese)
Zhou Xiaochuan, the former governor of China’s central bank, said on June 11 that “some cryptocurrencies” might “lose their chance to get into the digital payments field due to low efficiency and emphasis on decentralization and deregulation.” Zhou commented at the 13th Lujiazui Forum, a financial forum organized by the Shanghai government, China’s central bank, and others. Zhou is also widely regarded as one of the key people behind China’s digital yuan project. Zhou added that if people leading in the cryptocurrency space are in it for a quick profit, it would only make cryptocurrency more like digital assets, and less like “useful applications to the economy.” (Cailian Press, in Chinese)
Funding in blockchain
Red Date Technology, the architect of China’s state-backed blockchain initiative Blockchain Services Network (BSN), announced on June 10 that it had completed a $30 million Series A funding round with various global investors. (TechNode)
More digital yuan trials
- Local officials in China’s Xiong’an New Area said the region had begun trials of paying workers in digital yuan, using the Blockchain Fund Payment Platform, a blockchain-powered payment system run by the government. The trial received support from the Shijiazhuang branch of China’s central bank. The government said this was the first time they had run a digital yuan trial on a blockchain system. (CoinDesk)
- China’s smartphone and electronics maker Xiaomi announced on Saturday that it would start accepting digital yuan payments in more than a dozen selected stores in Beijing and Shanghai. The move is a reaction to the ongoing digital yuan trial in the two cities. (Xiaomi Zhijia, in Chinese)
Additional reporting by Julia Lu.