Experts warn of cryptocurrency risks
The Inner Mongolia Autonomous Region released a draft plan on Tuesday to phase out cryptocurrency “mining” activities in the experts region, after the central financial regulator restricted Bitcoin mining and trading.
Wang Juan, a member of the Organization for Economic Cooperation and Development (OECD) Blockchain Expert Policy Advisory Committee. Cryptocurrency-related transactions are mainly driven by speculative activities. Which have caused roller coaster price fluctuations and global fluctuations in recent months. Uncertainty in financial markets.
“Different from the early mining of cryptocurrencies such as Bitcoin, companies are now frantically seeking to consume a large amount of industrial electricity at all costs. This will undoubtedly cause a lot of waste of electricity and huge carbon emissions in China,” she said.
The Inner Mongolia draft outlines eight measures to eradicate cryptocurrency mining operators and promote operations. The draft includes Internet cafes that use idle computers to mine cryptocurrency.
The plan stated that any business or individual that uses cryptocurrency for money laundering or fundraising activities in the region may face criminal offences.
An Guangyong, a financial consultant and member of the China Mergers and Acquisitions Association.
Cryptocurrency mining does not bring any social value, but it will cause a huge waste of power. He said: “This is not in line with the efforts of many countries to build a green economy. For example, China has pledged to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.”
Ann said that a sound digital currency should be “healthy, supervisable, and controllable. Linked to national credit, and avoiding money laundering and other illegal activities.”
According to research published by Nature Communications, China accounts for more than 75% of global Bitcoin mining. According to the report, it is estimated that by 2024. Bitcoin will generate more than 130 million metric tons of carbon emissions in China.
Last Friday, the State Council Financial Stability and Development Committee meeting stated that the government resolutely cracked down on Bitcoin mining and trading. Increasing personal risks, and should not let it spread to the whole society.
Last week, three financial industry associations (China National Internet Finance Association. China Banking Association, and China Payment and Clearing Association) banned financial and payment institutions from participating in cryptocurrency business.
Zhang Xiaoyan, deputy dean of the School of Finance of the People’s Bank of China at Tsinghua University.
The regulatory policies for Bitcoin and other virtual currencies will also protect small and medium investors by preventing small and medium investors from speculative transactions. In China, many of them lack virtual currency. understand deeper.
Analysts warned that institutional restrictions on crypto asset investment will bring more disadvantages. Including the possibility of strengthening supervision and concerns about the carbon footprint of data mining, which will bring huge uncertainty to investors.
Bitcoin, the world’s largest cryptocurrency, experienced a roller coaster in transactions last week. Its value has fallen by more than 30% to close to $30,000, the lowest level since late January. However, after Tesla CEO Elon Musk said on Monday that he actively discussing the sustainability of digital currencies with Bitcoin miners. The price rose to around $39,000 on Wednesday afternoon.
According to a research report by Goldman Sachs, even when cryptocurrency prices are still extremely volatile. Financial institutions are still launching new crypto products and services.
The report stated that the volatility of cryptocurrencies such as Bitcoin may not end until the true economic use of Bitcoin is independent of price.
This research conducted during last week’s volatility shows that the trade between Bitcoin and Ethereum is approaching the historical high of 2018. Goldman Sachs quoted Michael Sonnenshein, CEO of Grayscale Investments, the world’s largest digital asset management company. As saying that institutional investors now generally believe that digital assets will continue to exist. Investors increasingly prefer assets of limited quality like Bitcoin to hedge against inflation and currency depreciation and to diversify their investment portfolios.