Bitcoin slumps as China crackdowns on cryptocurrency mining

Chinese authorities have scaled up their crackdown on cryptocurrencies which has caused market values to again drop. On 19 June, local officials in Sichuan province ordered mining projects related to cryptocurrency to close, according to Reuters. A post from the provincial authorities on social media stated that the power company to the supply of these mines must be cut off before 20 June.

China is a major mining centre for Bitcoin and other cryptocurrencies. As a region with huge hydropower capacity, Sichuan is one of the most important areas for mining.

Yet, this is not the first regional crackdown on cryptocurrencies. Over the past few months, many provinces in China have ordered the closure of mines, including Inner Mongolia and Qinghai province. 

The central government has also been taking a firm stand. Just yesterday, the People’s Bank of China announced that it had urged Alipay and other major financial organisations to curb crypto trading. The announcement caused the price of Bitcoin to fall to $32,288, meaning that the currency’s value has dropped by approximately 50% since a record high of above $63,000 in April.

In May, China’s top three financial industry regulators banned banks and payment institutions from offering any services involving cryptocurrencies either directly or indirectly. This followed an announcement in 2017 in which Beijing announced that digital currency payment had been made illegal on the grounds that it may damage the financial system and social stability. 

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