A few years ago, China raised concerns regarding bitcoin because it was considered very harmful to China’s environment. China is a country with a lot of carbon emissions already existing, so the government does not want any more of it. It has decided to create its infrastructure with the help it can create its digital currency, and therefore, China decided to ban bitcoin and operating sites.
In 2018, the Chinese authorities made some petitions regarding the bitcoin mining companies. The reason behind filing these petitions was to make sure that the bitcoin mining operation is carried on in what is China does not deliver any harmful impact on the environment as well as the financial stability of the Chinese government. However, this was not taken into serious consideration earlier, but it has been looked after very carefully.
China’s official position
If we talk about the Chinese official government, the Chinese government has always been skeptical about cryptocurrencies. One primary reason behind the same is that it does not want that privately-owned currency to take over the country’s financial ecosystem. Moreover, another reason for doing the same is that they were confused about the carbon emissions. Even though it was mainly because of the Chinese population, the government said it is also increasing because of the cryptocurrency mining operations. In 2017, the ICO was initially banned in China, so new cryptocurrencies could not be created. Moreover, the Chinese government had plans to ban all cryptocurrencies eventually, but back then, there was a lot of backlash from the people.
Recently, the Chinese government banned all cryptocurrency mining operations within the borders in 2019. It was a significant action taken by the Chinese government, and it has greatly affected the cryptocurrency, especially bitcoin. However, as time passed, people got used to it. Also, the cryptocurrency mining companies decided to shift their operational epicenter into other nations of the world.
China – the epicenter of bitcoin mining!
Before the ban on bitcoin mining and bitcoin trading in China, it was the epicenter and base for more than 47% of all cryptocurrency mining. The primary reason behind the growth of cryptocurrency mining in China is that it provides electricity at low prices. Moreover, there was a suitable ecosystem because of which there was no financial ban on cryptocurrency operations within the borders of China. However, As soon as the Chinese government decided to ban bitcoin and its operations, the companies related to cryptocurrency mining also picked other countries as their bases for operations.
Impact of the ban on crypto coins!
China was not familiar with the crypto currency’s giant BTC. Cryptocurrency leads the digital token market; therefore, the Chinese government has targeted bitcoins to suppress them. Therefore, the Chinese government decided to ban the bitcoin-related activities within the bodies before doing it for the other crypto coins. As soon as the ban was enacted, other cryptocurrencies also started to have an impact. But, as soon as the Chinese government took action, the cryptocurrency mining companies decided to shift their bases to other countries. Due to this, it took a little time, but the company was not stable after just a few days. Moreover, bitcoin was affected more than anything else, but it managed to take the ban in a little bit of time.
Response of the United States government
The United States is considered to be a strong competitor of the Chinese government, and therefore, it was expected that it is going to take some action. However, there was no set and legal action in the United States of America regarding the ban of bitcoins and other cryptocurrencies in China. The authorities did not take an official stand for the bitcoin ban, but they had something to say on their Twitter handle.
A famous person from the United States officials says that the Chinese government wants to create an authoritarian crackdown on cryptocurrencies. However, it can become an excellent opportunity for the United States of America. By stating all the facts, he also concluded that if the bitcoin mining operations are located in the United States, it will be an advantage for the United States over China. Another authority said that it would ultimately be permissionless for bitcoin to function within the borders of the United States of America. If China decides to ban it, the United States will shelter it.