Foreign media: China cracks down on cryptocurrency “mining” to support the construction of digital yuan

Reference News Network reported on April 28 that the Latin American news agency recently reported that China is cracking down on the “mining” of cryptocurrencies, while advancing the implementation of its unique digital currency plan.

According to the report, in 2021, the Financial Stability and Development Committee of the State Council of China will clearly put forward requirements for cracking down on bitcoin mining and trading, and resolutely prevent individual risks from being passed on to the social field, and the crackdown on bitcoin will become more intense.

Since then, Chinese authorities have officially classified virtual currency “mining” activities as a phase-out industry, banning various related projects and prohibiting financial institutions, companies and investors from using this payment method in any type of transaction.

The report believes that for China, the illegal mining of cryptocurrencies, in addition to challenging the traditional monetary system, also hinders its goal of achieving a sustainable economy, because each step of the “mining” process is costly in energy.

International registries once placed China at the center of the industry, with more than 75% of global business. Since Bitcoin is minted using multiple computers, it requires a lot of energy, most of which comes from fossil fuels.

According to calculations by The Digital Economist, virtual currency “mining” accounts for 0.3% of the world’s annual electricity consumption, and its expenditure is similar to that of Finland as a whole, and its annual carbon footprint is comparable to that of Switzerland.

Especially in China, according to a forecast study by Tsinghua University and the Academy of Social Sciences, without any policy intervention, the annual energy consumption of China’s Bitcoin blockchain will peak at 296.59 terawatt-hours in 2024, generating 130.5 million metric tons of carbon emission.

Such a conclusion has forced the Chinese government to take action against the industry and, starting in Inner Mongolia, demand the cancellation of all facilities associated with the lucrative business.

Observers say it is imperative to strengthen oversight of this new industry, monitor the illegal migration of bitcoin mining farms to other parts of the country, and curb the “pollute now, fix later” approach that has prevailed over the years as other industries have expanded. mentality.

While cleaning up its international cryptocurrency financial operations, China is putting its digital currency electronic payments, simply the digital renminbi, into practice, drawing world attention. The implementation of the digital yuan may affect the global economy dominated by the US dollar.

The digital yuan is backed by the People’s Bank of China, has the same value as physical currency, and is used through apps that allow settlement of daily accounts and internal bank transfers.

Fan Yifei, deputy governor of the People’s Bank of China, said the digital yuan project stemmed from the urgent need to digitize cash in the face of the high cost of printing money and coins and the persistence of crimes such as counterfeiting and money laundering.

Since 2019, China has been piloting digital yuan in different megacities, transportation and consumption sectors, with the biggest leap being its application in this year’s Beijing 2022 Winter Olympics scenario.

Industry insiders see the digital yuan project as a competitor to Alipay and WeChat, two of China’s most popular private digital payment platforms.

In the future, if the digital renminbi is applied to the commercial exchange of the “Belt and Road” initiative, it is expected to integrate people who still lack bank accounts and promote the internationalization of the renminbi.

The advancement of the digital yuan has even spurred the United States to work on developing a digital dollar backed by the Federal Reserve.

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