Great news for cryptocurrency miners as they can now leverage China’s abundant supply of cheap and affordable hydroelectric power for Bitcoin mining activities.
It’s a great moment of cheer for all cryptocurrency miners carrying out operations based out of China. In the latest development, the China National Development and Reform Commission (NDRC) has decided to withdraw its proposal of banning crypto-mining activities (including Bitcoin mining) taking place in the country.
On Wednesday, November 5, the NDRC published a new catalog for Guiding Industry Restructuring. The new version replaces the earlier one created in 2011 wherein the agency had proposed banning the crypto mining activities in China.
6 months ago CT was screaming abt “China banning bitcoin mining” when a fuzzy drafted “guideline” was published by China state planning dept
The official version is out: cryptocurrency mining is removed from the “eliminating category”
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 6, 2019
China is known for taking hard-hitting measures on public cryptocurrencies and other crypto-related activities. Two years back in 2017, the Asia economic powerhouse banned crypto trading activities within its borders. As a result, all crypto-based companies and trading platforms had to shut down their operations overnight.
However, China still remains an attractive destination for cryptocurrency miners due to the availability of cheap and surplus electricity. Crypto mining activities require a high amount of electricity for high-end mining hardware.
However, the NDRC’s pressure was causing miners to remains skeptical and move their base out of China. But it looks like after the new guidelines miners will once again consider setting their base in China. Regions like Sichuan and Xinjiang have seen a massive influx of miners over the last few years due to its surplus hydroelectric power-supplying capabilities.
Coming to the crypto front, China is itself working on its CBDC plans. Needless to say that the supply and control of the CBDC will be in the central bank’s ambit. China’s CBDC plans is certainly giving other global economies like the EU and the U.S. to consider their own digital currencies. It would be interesting to see how it can impact public cryptocurrencies like Bitcoin.
How China’s CBDC Can Impact Bitcoin?
As China progresses with its CBDC plans, the rumor in the market is that the CBDC will be backed by something more tangible like the Gold. Even if China’s Digital Yuan will represent the native fiat currency, it will be backed by Gold said Bitcoin evangelist Max Keiser. During a recent interview with Keto News, Keiser said:
“I can tell you that the cryptocurrency China is rolling out will be backed by gold.”
Keiser believes that China has been massively increasing its gold reserves over the last few years. He said that China might declare having 20,000 tonnes of gold against 2,000 tonnes as previously claimed by them. This could be a big blow to the USD, said Keiser.
Adding spice to this, Bitcoin critic Peter Schiff recently said that if China launches a Digital Yuan backed by Gold, it could be a big blow to Bitcoin as well. Reiterating on his earlier stand that Bitcoin has no intrinsic value, he tweeted:
According to @maxkeiser I’m an idiot because I think #gold is better money than #Bitcoin. He also claims China is about to launch a crypto currency backed by gold. This is bullish for gold and bearish for Bitcoin. A crypto backed by gold is much better than one backed by nothing!
— Peter Schiff (@PeterSchiff) November 1, 2019
Well, the latest decision by China of NOT banning Bitcoin could really prove to be a catalyst for the world’s largest cryptocurrencies. With several global developments ahead in the crypto space, it would be interesting to see how things take shape.