China, having been the first major nation to try and stamp out Bitcoin a few years back, is rapidly returning to the significant decentralized cryptocurrency. The latest move from the government now sees a reversal in the plans to ban cryptocurrency mining.
After banning ICOs, access to cryptocurrencies, and even access to crypto outside of China, the People’s Republic affected a pretty powerful blockade of Bitcoin – but still maintained its appreciation of Blockchain. Recent developments have seen the government reaffirm its blockchain belief, but it has also seen a softening on its approach to crypto.
The change in attitude was noted in the new edition of China’s Industrial Structure Adjustment Guidance Catalog, which will take effect from the start of 2020. The document no longer lists cryptocurrency mining as an industry the government sees as undesirable.
It was brought to the attention of Twitter through Blockstream CSO Samson Mow.
This change in attitude towards cryptocurrency has not been formally noted by the government; in fact, there have been warnings that blockchain advancement and cryptocurrency acceptance do not go hand in hand.
However, that has not been enough to stop interest piquing, and different players re-entering the space. For instance, Bitcoin miners were quietly advised to head towards Sichuan province for its abundant hydroelectric energy – and they will now feel safer, and vindicated, by this latest news.
More so, there has been a reemergence of blockchain VC interest in China following the president’s remarks about the importance of the technology. Chinese VCs are finding it easier to re-enter the market thanks to the ease of raising money. Chinese financial data tracker 01Caijing reported that Chinese blockchain startups raised $368 million via 71 funding deals during the 1st half of 2019.
The extent of this warming towards cryptocurrencies will be interesting to watch for China has been steadfast in its disapproval of a financial system it cannot control. In fact, it has even pushed the People’s Republic to soon launch its own digital currency in combating Bitcoin.
China is unlikely to lift an of its major bans in the near future, but it could well be turning a blind eye on allowing the decentralized aspect of Blockchain to reemerge – as long as it serves their needs. Crypto mining is starting to be realized as a good avenue for governments to profit through taxation, as Iran has recently moved towards.