In the whole of 2021, several events took place, which led to the fluctuations in the prices of bitcoins. However, the most important one was the ban of bitcoin (BTC) mining in China. On the one hand, there was a lot of news that gave ammunition to the government’s imposing strict regulations on the prices of bitcoins. On the other hand, however, China came out as an economy that took action regarding the increasing trend of bitcoins worldwide. The increasing hash rate in bitcoin became one of the essential cryptocurrencies globally despite being criticized by several international organizations. China was among the top cryptocurrency mining nations, and still, it led to banning mining altogether. What were the good reasons behind it?
Some people believe that it is nothing else but the increasing carbon emissions in the geographical boundaries of China. However, many other experts believe that China is not stupid to ban its most crucial activity because of the degradation of the environment. There are going to be some significant reasons behind the same. However, no one is sure about the best reason, but experts still make many assumptions. Some believe that there is only one reason because of why China is doing so. However, many others believe that there will be several reasons why China has taken this step. According to the different news channels and experts, several theories are coming out of nowhere. We will discuss them to get to know why China has done this even though it was one of the essential activities for the country.
The digital Yuan CBDC
The good reason that many experts have predicted for China banning all the cryptocurrency mining operations in the country is none other than launching on its own central bank digital currency. According to the officials, the digital Yuan is addicted to coming up this year or the coming year. There are a lot of talks between the officials regarding launching a new digital currency of the country. Therefore, it has banned cryptocurrency mining operations entirely within its geographical boundaries. No other reason could be as promising as this one because it will make its billion-dollar industry within just a few seconds. Without thinking twice, there could not be any other possible reason behind banning a potential billion-dollar industry. It ended up as the whole square of competition in the country of China. You can find more information on how bitcoin could add value to your business operations.
Energy blackouts
We are all very well aware that cryptocurrency mining has quite a lot of energy consumption, and China has a lot of it. Still, there were reports that China is facing a lot of energy blackouts because of the cryptocurrency mining operations going on in the country. Just a few months before the banning of cryptocurrency mining operations in the country, there were reports about China facing a lot of energy blackouts. The chairman of the Blockchain special committee in China says that the country’s environmental requirements may have some strict regulations on cryptocurrency mining operations. Therefore, the country has banned bitcoin mining altogether.
New China model
A critical reason China might have banned bitcoin mining is launching the new China model. Earlier, there were a lot of multinational companies working within the nation, and it was not at all the goal of the country. However, China is highly inclined to launch its country model and become less founder-driven and more China-centric. The new model suggests that the full power of operating the country will be within the hands of the government. Therefore, it is rolling out such a colossal industry and launching its cryptocurrency.
Realizing that bitcoin is hard to use China has never been in support of the highly developed economy of cryptocurrencies. They are spreading like fire worldwide, but still, China wants to make people realize that it is not regulated. As cryptocurrencies like bitcoins are not regulated in any country of the world, they are tough to use for people. Nowadays, many privately-owned organizations are regulating these cryptocurrencies; nations’ governments face tremendous problems. China wanted to make people realize that it is not a currency they can use whenever they want. The higher officials can ban them every time, and therefore, their fans are not secured.
