- China may end its clampdown on tech companies soon.
- China once hosted the majority of bitcoin hash rate.
- The news may have had an indirect positive effect on the crypto market.
China announced that its two-year crackdown against tech companies is about to end. This was according to Guo Shuqing, Secretary of the People’s Bank of China (PBOC).
As published by Nikkei Asia, China only needs to “complete” its clampdown to rectify 14 internet platform companies’ financial businesses, with “few remaining issues to resolve.” Soon, China will normalize the “supervision” of the tech industry. What is more, Guo said that the country will provide support to the sector to encourage global competency.
During the two-year clampdown, China was able to stifle the progress of crypto firms that operated within the country. For instance, Jack Ma’s Ant Group, which dabbled in blockchain, suffered harsh conditions from regulators, which led to the suspension of its much-anticipated initial public offering (IPO).
In addition, prior to China’s crypto crackdown, the country hosted the majority of bitcoin mining operations, which worried many global leaders. These included former President Donald Trump, who went on to say that China controlled Bitcoin.
Previous bitcoin mining operations have since moved to other countries including Kazakhstan, Iran, the United States, and more.
Now, once China has eased its tech policing, bitcoin miners may be encouraged to return to the country, given its relatively cheaper electricity and operating costs.
At the moment, a considerable amount of hash rate comes from US-based companies, including publicly traded firms like Core Scientific and Riot Blockchain. However, the US has been ambivalent at best with crypto, while the Securities and Exchange Commission (SEC) is notorious for suing crypto companies left and right. In addition, many of the publicly traded firms have been capitulating for a time.
Time will tell whether China will indeed welcome back bitcoin mining to its shores. Regardless, some have been saying that the recent news is already causing a momentum shift in favor of the crypto market. At the time of writing, BTC is changing hands at $17,236.43, according to CoinMarketCap.
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Jesus covers news related to the crypto space in Asia and in Australia, although he follows the latest events in the US and Europe as well. He is most interested in the blockchain gaming and regulation aspects of the industry.
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