In the wake of testing its central bank backed digital currency in different cities, China intensified its crackdown on block reward mining operations and digital currency transactions.
China has toughened its stance against the rapidly growing industry by ordering the 26 largest mining facilities in Sichuan province, considered to be the world’s largest hydro-powered mining area, to stop its operations. The probe was initiated after a series of meetings by the local Development and Reform Commission’s Energy Bureau.
In May, Inner Mongolia’s National Development and Reform Commission (NDRC) issued draft guidelines on its plan to stop mining operations, providing authorities a track on how to execute expanding the ban to more block reward mining farms. This month, local governments in Yunnan, Xinjiang and Qinghai have also announced their plans to shut down mining operations.
BTC’s hashrate immediately dropped by 17%, following the announcement. Data show that miners in China are responsible for over 65 percent of BTC network’s hashrate.
Meanwhile, the People’s Bank of China (PBoC) has also ordered financial institution to stop and block digital currency transactions. The banks and finance firms have agreed to PBoC’s guidelines to prohibit digital-currency related transactions and activities including clearing and settlement.
Amid this fresh crackdown, the Chinese government through the Industrial and Commercial Bank of China (ICBC) deployed more than 3,000 automated teller machines (ATM) in Beijing. These ATMs can convert digital yuan to fiat, and vice versa.
China is currently testing digital yuan and has conducted 11 rounds of giveaway lotteries since October 2020 in six cities—Shenzhen, Suzhou, Beijing, Chengdu, Changsha and Shanghai. The government has rolled out more than $40 million worth of digital yuan with up to 350,000 local residents per city as lottery winners. The country is yet to announce an official date for its launch.
Due to China’s crackdown, many mining firms have announced moving their operations overseas—and the U.S. is coming to their rescue.
A number of states are opening their borders to the seemingly displaced industry. Miami Mayor Francis Suarez said the city welcomes the Chinese BTC miners as a new home for their mining operations. The mayor noted the city’s unlimited and cheap nuclear power supply, which could attract BTC miners to move their operations to Florida. In a media interview, Suarez said that he is also considering more incentives including enterprise zones with tax reductions and industry-friendly regulations.
Another city aiming to become America’s next digital currency hub is Chicago in the state of Illinois. The city is host to one of the Midwest’s largest block reward mining facilities. It houses large trading firms that are also active in digital currency trading.
Illinois is emerging as another epicenter for the digital asset space as it plans to issue a bill similar to Wyoming’s special-purpose depository institutions (SPDI) charters. SPDIs are banks that receive deposits and other related activities focused on digital assets – digital currencies, digital securities, and digital consumer assets.
Meanwhile in South Africa, Centbee’s Minit Money has joined the government regulatory sandbox.
The Intergovernmental Fintech Working Group (IFWG) initiated sandbox was set up to test new technologies or business models against existing and developing regulatory frameworks. The group is comprised of several South African regulators.
Centbee and more than 50 other fintech firms had applied for inclusion in the sandbox, but only six were accepted. Minit Money, Centbee’s cross-border remittance app, is included to test the regulatory treatment of digital currency assets for low-value cross-border remittances between South Africa and Ghana. It enables foreigners living in South Africa to send money back to their homes in other African countries at a low cost.
Centbee is a digital currency wallet built on the BSV blockchain. South African locals can use it to purchase prepaid data, airtime, electricity and gaming vouchers in app.
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