May 25, 2021
Bitcoin experienced another rollercoaster ride over the weekend after the Chinese government announced a crackdown on mining.
The committee that announced the crackdown is led by Vice Premier Liu He, who is President Xi Jinping’s top economic and financial official.
An article by Xinhua News, the official Communist Party medium, took a tough stance on Bitcoin, expressing concerns about its role in money laundering, drug trafficking, and smuggling.
It also mentioned the cryptocurrency’s high energy requirements.
The Chinese government has warned financial institutions against getting involved in crypto-transactions.
With 75% of the world’s bitcoin production taking place in China, the Chinese government’s tough stance is certain to push many miners out of the country and shift their activities to neighboring Mongolia or as far away as Kazakhstan and Afghanistan.
Meanwhile, in the United States, the U.S. Treasury Department has announced that companies must report transactions involving cryptocurrencies over $10,000 to the Internal Revenue Service.
Earlier this month, three U.S. agencies, the IRS, the Department of Justice, and the Commodity Futures Trading Commission, investigated Binance on cryptocurrency exchanges for possible criminal liability.
Bitcoin mining requires a staggering amount of energy, comparable to the electricity demand of the entire Netherlands.
A few weeks ago, Tesla CEO Elon Musk announced that they would no longer accept Bitcoin as a way of payment for his electric vehicles because of the environmental hazards posed by the cryptocurrency.
For more information, read the original story in Arstechnica.
