Virtual currency will usher in a more powerful rectification.
In the three financial associations, the three financial associations reiterated that virtual currency-related businesses were suspected of crimes. Three days after Inner Mongolia established a virtual currency mining enterprise reporting platform, the State Council’s Financial Committee proposed to crack down on Bitcoin mining And trading behavior.
On May 21, the Financial Stability and Development Committee of the State Council (hereinafter referred to as the Financial Committee) held its 51st meeting. The meeting called for resolute prevention and control of financial risks and cracking down on Bitcoin Coin mining and trading behaviors, and resolutely prevent individual risks from being transmitted to the social field.
Affected by this, the price of Bitcoin has fallen. According to data from the Bitcoin news website Coindesk, it has fallen from around US$41,000 to a minimum of US$33,594. As of press time, the price of Bitcoin is approximately US$37,000 and the market value is approximately US$695 billion.
Dong Ximiao, chief researcher of Merchants Finance and a part-time researcher of Fudan University Institute of Finance, believes that the Financial Commission’s emphasis on “combating Bitcoin mining and trading” will rectify the virtual currency market The rise to the height of the State Council indicates that the next step will be to introduce measures to increase the crackdown on illegal transactions in virtual currencies such as Bitcoin.
Fintech expert Su Xiaorui also mentioned that compared with the previous policy content, the Financial Committee meeting is based on the direction of financial stability, “resolutely prevent and control, resolutely prevent “The tone is heavy, perhaps it is a regulatory signal, and the follow-up may start to “crack” to take action. Virtual currency was also included in the illegal fund-raising regulations at the beginning of the year, which provided a documentary basis.
An industry insider said that some time ago, animal coins (Dogecoins, shib coins-Shiba Inu coins) were popular, and some abnormal emotions were indeed generated. It is the proper meaning of the state to make these statements to maintain the overall social order. However, in terms of specific implementation, we still need to observe whether we should start from the direction of preventing risk transmission or do a thorough one-size-fits-all approach. The effects of these two approaches are different.
Sichuan mines have been out of power for several days
Associate Professor Wang Zhicheng, Guanghua School of Management, Peking University, said that Bitcoin mining occupies limited chip-related resources. And there is a problem of high energy consumption, a large amount of electricity used for mining runs counter to the goal of carbon neutrality.
University of Cambridge Alternative Finance ResearchData from the center shows that as of May 17, 2021, the global annual power consumption of Bitcoin mining is approximately 134.89 TWh (1 TWh is 1 billion kWh). If Bitcoin is compared to a “country”, its global power consumption ranks 27th, surpassing Sweden.
Wang Zhicheng believes that if Bitcoin does not have these centralized mining similar to “playing games”, it will use the idle resources of the Internet to develop slowly and be sufficiently dispersed. In the hands of a large number of IT personnel, it may be a more valuable algorithm game, which gradually puts technology and mechanisms into practical use in entertainment, and contributes to the equalization of human society.
“It is necessary to combat centralized mining, and restricting some transactions is also beneficial.” Wang Zhicheng said.
A mining pool practitioner told reporters that he believes that mining itself does not belong to the financial industry. Get the news in no time.
According to news reporters, a number of Sichuan mine owners stated that their mines have been out of power for several days. A mine owner revealed: “Speaking of the suspension, we don’t know when to start, and we are also at a loss.”
Another mine owner revealed that the high water period has not yet come, and it may be “good” on May 25.
According to a China Times report on May 20, on May 14, State Grid Sichuan Abazhou Electric Power Co., Ltd. issued a notice of power cuts. According to the notice, since May, the power load of the Sichuan power grid has continued to grow at a high speed, coupled with the lack of incoming water, the shortage of electric coal supply, and the severe power supply form. After research by relevant provincial departments, it is planned to implement temporary all-day power rationing on all big data users in the hydropower consumption demonstration area from May 16. The recovery time will be notified separately according to supply and demand.
Prevent risk from being transmitted to the social field
The Financial Committee also mentioned that it is necessary to “resolutely prevent individual risks from being transmitted to the social field.”
Wang Zhicheng believes that the content of the meeting has been converged with the previous few days, and the problem lies in the exchange rate shock and the risk of liquidation.
He said that because RMB cannot be directly exchanged with Bitcoin, it should be exchanged for USDT first.(U.S. dollar stable currency), USDT is backed by the U.S. dollar, in fact, it is exchanged. Liquidation means that many people use leveraged funds to buy and sell Bitcoin. If there are no restrictions, a large amount of funds borrowed by financial institutions will participate, and problems will arise if they lose money.
However, a Bitcoin investment told reporters that in addition to rectifying mining and restricting domestic social media, the country may increase investigations, such as by checking banks Abnormal transfers, cracking down on OTC (over-the-counter transactions), and cutting off the link between the RMB and digital currencies. But trying to completely block it is a challenge.
“If the country is determined to rectify, then Bitcoin mining will also be de-Chinese. The country can also restrict social media information about the currency market, but as long as the currency market is active , The transaction is difficult to stop.” He said.