The ruling Chinese Communist Party have decided it is further in their citizens interest to crack down even harder on Cryptocurrencies, including bitcoin. On June 9th 2021, the Xinjiang district government issued an edict to “Immediately suspect virtual currency mining…” giving mining operations less just a few hours to cease activity on the very same day with the net effect being an immediate and significant drop in Bitcoin’s global hash rate.
And this is in addition to other anti-crypto moves which the repressive regime has enacted recently, with Chinese search engines Baidu and Weibo blocking searches for Binance, Huobi and OKEx exchanges. And one thing is for sure in China… nothing significant happens in China without the hand of the communist regime all over it.
So, what’s really behind the Chinese Communist Party’s expanded attacks on Bitcoin? Obviously, in the absence of official statements by the regime (and if history is anything to go by, one could be forgiven for taking them with a pinch of salt anyway), it’s impossible to truly derive the real intention behind the CCP’s latest round of crypto censorship.
Indeed, it is highly likely that the Chinese government’s increased hostility to crypto-activities in the country is simply a way to ensure the hegemony of the anticipated release of their widely touted Digital Yuan. Libertarians throughout the world, even those who celebrate blockchain, may be disturbed by the very country which having already introduced a social credit system to impose systematic controls on it’s population and which many have touted as having one of the worst contemporary records on human rights and civil liberties, suddenly is leading the charge in Central Bank Digital Currencies (CBDC’s)….which of course the Communist Party has absolutely no interest in ensuring is fully decentralized.
In many ways, the Chinese government’s actions may have much wider political and economic implications, and it’s unlikely that protecting their citizens from some perceived threat to their wealth is hardly one of them. At this time, the Chinese government are both under pressure internationally as the Covid-19 lab-leak theory gains ground, and outrage over stories of genocide, torture and slavery of the Uighur population gains traction. And that’s not all. China, it appears, are flexing their muscles against both the United States and the disputed island of Taiwan, in an escalation of tensions which have even included threats of nuclear conflict coming from senior government officials in the country.
Could it be that this is yet another weapon in the cold-war against the US Dollar, which is already reeling from unprecedented money-printing over the last year, and the Biden Administration’s obsession with saddling the American people with more debt over their contentious ‘infrastructure’ bill… which many commentators have pointed out has a great deal more to do with pushing the climate change agenda than American physical and economic infrastructure upgrades.
A continuation of CCP crypto censorship
However, it may be that this is simply a continuation of the policy we have seen many times before in China, where, as the Hong Kong’s Bitcoin Association succinctly put it in a recent tweet: “For those new to bitcoin, it is customary for the People’s Bank of China to ban bitcoin at least once in a bull cycle.”
Either way, the latest attack on Bitcoin should give those of us in the crypto world pause. Of course, out of adversity often comes great opportunity (especially for European and USA based mining firms, who will be very happy to pick up the slack caused by the huge drop in hashing power coming out of the country), but a word of warning for those in the cryptosphere who aren’t paying attention. The CCP, if nothing else, loves to assert dominance, and if by it’s actions it can cause some harm to adversaries in the West, then it will jump on it with great gusto. And a globally dominant CCP should terrify everyone who actually still holds the traditional belief in liberty, free market capitalism and freedom from economic fascism. You have been warned.