Fight against cryptocurrencies China closes data centers

As of: 06/22/2021 8:26 am

Virtual means of payment like Bitcoin are a thorn in the side of the Chinese government. That is why it is vehemently against it: Now data centers have been switched off in several parts of the country.

From Steffen Wurzel, ARD studio Shanghai

The Chinese government continues to vehemently oppose everything that has to do with Bitcoin. Banks and financial service providers were again asked not to offer any more services that have to do with crypto payment methods. One wants to preserve the stability and the security of the financial market and protect the assets and property of the population, said the state central bank of China.

China had banned trading in crypto-currency such as Bitcoin as early as 2017, as the first large country in the world. The so-called mining, however, i.e. the electronic generation of Bitcoins and Co with huge computer networks, was still tolerated by the Chinese authorities. The government has only been systematically taking action against decentralized and digital means of payment for around six weeks. Huge data centers were shut down in several parts of the country. Most recently, around two thirds of all new Bitcoins worldwide were generated with computers in China. This share will now decrease rapidly and significantly, say analysts.

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Concept of bitcoin contradicts politics

Monetary and currency policy are centrally controlled in China. The central bank is directly under the communist leadership. The Chinese currency, renminbi or yuan, is not freely convertible. The decentralized and open concept of Bitcoin contradicts this policy and is therefore rejected by the Chinese government. At the same time, the government is working on its own digital currency, which, however, has almost nothing to do with Bitcoin.

The stricter action taken by the Chinese authorities against crypto-currency has helped Bitcoin to lose around half of its value in the past two months. The Bitcoin price is still a good three times as high as a year ago