Beijing's complicated relationship with crypto

Digital assets and blockchain-based financial services have the potential to cause a major shift in the global financial world. However, Beijing is particularly concerned about crypto mining due to its high power demand. The leadership is announcing new measures against mining and threatening to raise prices. But Beijing can't quite let go of digital currencies – and continues to allow companies like Huobi to participate in the crypto boom.

Frank Sieren

The mining of Bitcoins needs power. If it is mainly generated by burning coal, Bitcoin mining quickly becomes an environmental problem. This is why China's authorities want to crack down on crypto-mining even harder: The practice is "extremely harmful" and jeopardizes the country's efforts to reduce its CO2 emissions, National Development and Reform Commission spokesperson Meng Wei said Tuesday. Institutions that "abuse" subsidized electricity rates to mine cryptocurrencies would face a price hike. Following her remarks, the bitcoin price dropped more than seven percent to $60,889, the lowest in more than a week. Ethereum, the second-largest digital currency, also slid more than eight percent on Tuesday.

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