China’s Central Bank says Crypto Crackdown Completed and Now Back to Normal Supervision
“The battle to prevent and resolve major financial risks has achieved important phased results,” reads the translated version of the China Financial Stability Report 2021 from the country’s central bank.
As part of its financial stability measures, the central bank cracked down on several activities, including crypto mining and derivatives trading, earlier this year.
This crackdown in China led to the shutdown of crypto mining operations in the country, leading to a crash in the hash rate of the Bitcoin network. After fleeing China, these miners are now coming back online overseas, as seen in the recovery in the hash rate, which is up 55% from early July, when it hit an almost two-year low.
This crackdown also led to a more than 50% drop in Bitcoin price, which went under $28k in June. Since July low, BTC/USD is now back above $50,500, up 73% YTD.
In its report, the People's Bank of China (PBOC) noted that the crackdown on virtual currency transactions has been completed and has now been transferred to normalized supervision, shared Chinese publication Wu Blockchain.
“Bids filled, crackdown completed?” quipped Su Zhu, the CEO, and co-founder of Three Arrows Capital.
“FYI when BTC is in the 400-800k range, I think we will see a ton of govt crackdown psyops as they attempt to fill bids, similar to the jawboning we see in FX markets.”
Meanwhile, the report noted that the central bank’s measure to mitigate internet financial risks had achieved good results with all P2P online lending institutions in operation closed down, including internet asset management, equity crowdfunding, internet insurance, virtual currency trading, internet foreign exchange trading, and other fields.
The rectification work is “basically completed; it has been transferred to normalized supervision,” it added.