To this day, there are still a lot of questions and uncertainties regarding the Bitcoin situation in China. While it is evident large exchanges will halt CNY trading, it remains to be seen if the mining sector will be affected as well. For now, it does not appear this will be the case, and Charlie Lee recently stated as much on Twitter. However, there is no official source either confirming or countering Lee’s tweet.
Mining Cryptocurrency in China is Still Fine
Given China’s stance on Bitcoin and cryptocurrency these days, it is not entirely surprising that there are a lot of questions remaining to be answered. More specifically, we know the exchanges in the country will effectively halt the trading of Bitcoin and other altcoins linked to the CNY market. That much is a given right now, although cryptocurrencies themselves can effectively be exchanged intermittently. The latter point confirms that China has no plans to outlaw Bitcoin by any means.
One thing that remains a big mystery is whether or not cryptocurrency mining operations in the country will be affected in any significant manner. More specifically, there has been no official statement regarding the ban of mining operations, but the PBoC and Chinese government have not officially stated they will allow it to continue either. This vague stance regarding mining is quite troublesome when looking at the bigger picture in China.
1/ I have a trusted source that says that there's no truth to China banning mining or network.
FYI, I haven't made any trades on this info.
— Charlie Lee (@SatoshiLite) September 22, 2017
According to the above tweet by Charlie Lee, there currently are no plans to suspend cryptocurrency mining in the country. Although he claims to have a trusted source, it remains to be seen if this is actually the case. Most people are well aware that Chinese mining pools provide a lot of hashpower to the Bitcoin network right now. The same goes for Litecoin and a few other cryptocurrencies in existence today. If that support were to cease all of a sudden, things could get very dire for all affected currencies.
There are multiple reasons why China wouldn’t ban cryptocurrency mining, though. First of all, the government is not cracking down on cryptocurrencies themselves. It simply wants to get a much tighter grasp on capital outflows involving CNY. Up to this point, buying and selling cryptocurrency was one way to successfully circumvent most limits in this regard. It was only a matter of time before the government started paying closer attention to this.
Secondly, the Chinese government isn’t banning the exchange of cryptocurrencies either. Indeed, exchange users can still trade between different cryptocurrencies without any problem. This indicates there is plenty of reason to let people mine cryptocurrencies, although care must be taken to not attribute value to cryptos themselves. The latter are tradable only against other cryptocurrencies in China, but it is possible users would find ways to circumvent the “ban on fiat trading” using other methods.
Assuming the mining of cryptocurrency is not prohibited in China, things will get pretty interesting moving forward. This shows the country will remain a big player in the cryptocurrency industry as a whole. Moreover, it goes to show any negative repercussions of decisions made by the PBoC should be behind us from now on. The central bank played its final card and will have no other means of affecting cryptocurrency markets whatsoever. An interesting future lies ahead for cryptocurrency, though; that much is certain.