China State-Owned Media Says People Are Allowed to Participate In Crypto At Their Own Risk
It is those packaged as a “profitable” speculative object to attract investors to the crypto trading platforms that need supervision. Meanwhile, Canaan argues against the indiscriminate crackdown, saying crypto mining helps make better use of electricity.
- China state-owned media has been publishing a series of articles about virtual currency to help clarify China’s stance on cryptocurrencies.
According to Xinhua News Agency, Bitcoin and other virtual currencies are only traded as virtual goods and people are allowed to participate in the transactions at their own risk.
However, if they are packaged as a “profitable” speculative object to attract investors to the cryptocurrency trading platforms, it is necessary to tighten the institutional fence and safeguard the interests of the common people, it said.
Commenting on regulation, the media says the supervision of crypto trading activities is not a single task by a single department but needs a comprehensive approach and that relevant departments should participate in the implementation of functional supervision as per their respective responsibilities.
It goes on to note that this isn’t the first official statement from the authorities and even back in December 2013 the People's Bank of China had said that “as a commodity trading activity on the Internet, ordinary people have the freedom to participate in bitcoin trading at their own risk.”
As we reported, ahead of the 100th anniversary of China's ruling communist party on July 1st, the regulators are focused on high leverage derivatives trading and not curbing the buy, sell, and holding of cryptos.
Hypothesis: if China further curtails the use of leverage on centralized exchanges, the primary beneficiary would be AMM exchanges built for long tail shitcoins https://t.co/N1drsKeYif
— Jason Choi (@mrjasonchoi) June 3, 2021
Moving Away from Uncertainty
Amidst the reports of China cracking down on crypto mining, Nasdaq-listed Canaan Inc argued against an indiscriminate crackdown, saying not only it helps make better use of electricity but contributes to the local economy.
Zhang Nangeng, CEO of the major Chinese maker of bitcoin mining machines, told an earnings conference call that those mining activities powered by clean energy should be spared from the crackdown.
“For-profit miners prefer regions with low electricity prices that indicate oversupply, and likely energy waste,” Zhang said. Additionally, “bitcoin miners also help create jobs in impoverished regions and contribute to fiscal coffers.”
The ongoing uncertainty meanwhile is making domestic miners move overseas, he said, adding, it is also prompting them to “undersell” mining equipment and some clients to hold off placing new orders.
Canaan itself is accelerating its overseas expansion and securing long-term contractors. They have set up an office in Singapore, and are preparing to launch a crypto mining business in Kazakhstan.
“Just as it took a long time for bitcoin to be recognized by the market, there will also be a (long) process for bitcoin, and crypto mining, to be recognized by regulators” in China, Zhang said.
Elsewhere, Cathie Wood of Ark Invest emphasizes that a push toward relying on renewable energy for bitcoin mining could make the underperforming solar industry more attractive.
“We have not really been able to say that in a big way about solar, this dynamic might change that. So I'm actually quite excited about it.”