Crypto-currency can be used in El Salvador to purchase a Big Mac. The rise of crypto-mining has been seen in Russia and Kazakhstan. In China, however, the Communist Party is bent on destroying every form of cryptocurrency except a still-to-be-developed digital yuan that isn’t really a cryptocurrency at all.
Chinese regulations have been in place for years to prevent the popular adoption of cryptocurrency across the country. Karman Luciero at Yale Law School’s Paul Tsai China Center believes that the new regulation announced on September 15th was different. The language in it is “somewhat scaryly broad”.
The regulatory notice promised to shut down both cryptocurrency mining—a process through which computers around the world maintain and secure the network—and foreign cryptocurrency exchanges. China has made domestic cryptocurrency exchanges illegal since 2017. The Chinese Communist Party (CCP), however, has been openly hostile to the use of crypto. The government seems to be getting increasingly aggressive, so it is not surprising. The new rules’ language, however, is difficult to comprehend.
“One of the reasons this may be different,” Lucero said. “It is because of the actors involved in this latest crackdown language.” These regulations will be enforced “by the most powerful regulators with most power,” who can “force people to change their behaviour or put them in jail for breaking certain rules.” Lucero claims that multiple references to the Ministry of Public Security are made. Public order“One of the most common clauses in Chinese law” which gives the government the ability to enforce laws in whatever manner suits their needs.
China used to have a vibrant mining industry. This was measured by the global hashrate, which measures the computational power required for extracting cryptocurrency. Between 2017 and early 2020, around 60% to 70% of all global cryptocurrency production in China was due to crypto’s liberatory potential.
China now sees value in digital currencies, but it only has complete control over them. The CCP is currently developing regulations that will allow Beijing to issue a CCP-issued digital Yuan. This would give Beijing the ability to monitor spending and track transactions in real time. The Wall Street Journal. A digital yuan, instead of bitcoin’s privacy and other smaller anonymous cryptocurrency, would allow China to monitor transaction amounts and senders as well as recipients.
Some observers around the world believe that China’s high-energy cost crypto has led to a clampdown. CCP’s priority was to control markets long before they cared much about China’s carbon footprint.
Also, the government works to inhibit Big Tech companies with its strict privacy laws. This is ostensibly to protect consumers data from private businesses (but from agents of state), as well as new regulations for ride-sharing platforms and messaging apps. The Chinese government obstructed the Ant Group’s initial public offering. Jack Ma is China’s equivalent to a Silicon Valley billionaire.
China’s grand plans remain shrouded by secrecy. However, it seems to be driven by CCP’s desire for economic control and insistence that private investment should be determined by government policy. As it has made clear time and again over many decades, the party is hostile to sharing power, even if—perhaps Particularly if—Chinese consumers find the proposition appealing.
America, on the other hand, should be a country where such technologies thrive. Many American politicians have been mimicking the CCP in crypto-related oversight. The President Joe Biden is looking to nominate crypto foe Saule Omarova as the currency comptroller. Gary Gensler, Chair of Securities and Exchange Commission has pledged to improve crypto oversight and to claim that crypto technology’s “long-term viability” is low.
A good crypto policy does not necessarily mean that you should do the exact opposite of China. However, it is not difficult.