Skip to Content
Blockchain

Why China’s kicking out the crypto miners

The intensifying crackdown has sent cryptocurrency prices tumbling.

Bictoin mining machines are running at a bitcoin farm in China's Sichuan province
Bictoin mining machines are running at a bitcoin farm in China's Sichuan province
Bictoin mining machines are running at a bitcoin farm in China's Sichuan provinceAP

The news: China’s intensifying crackdown has sent cryptocurrency prices tumbling. China has been upping its regulatory squeeze on cryptocurrencies for some time, but it now looks likely that over 90% of Bitcoin mining capacity in the country will shut down, according to a report in the Global Times, which is published by the Chinese state. Last Friday, authorities in the southwestern province of Sichuan ordered crypto miners in the region to cease operating. 

Yesterday, China’s central bank announced it was ordering banks to crack down on cryptocurrency trading. 

The effects: On the same day, Bitcoin’s price dropped to $31,333—it’s fallen by 20% in the last week—amid increasing uncertainty about its future. Other cryptocurrencies also tumbled, and the entire market has dropped in value by 12% over the past couple of days, according to the cryptocurrency exchange platform CoinBase. These events are having an impact on hardware prices, too. Chinese consumers seeking to purchase graphics cards, which are critical components for Bitcoin mining, have found sharply lower prices in the past day or so. Some prices had plunged by as much as 66%, according to the South China Morning Post.

Why now: China sees cryptocurrencies, which are decentralized and unregulated, as a threat. Its central bank said they have “disrupted the normal order of the economy” and “increase the risks of illegal cross-border transfers of assets and illegal activities such as money laundering.” It is planning to become the first country to launch its own official digital currency, the e-yuan.

Another alternative: Bitcoin mining won’t cease because of China’s crackdown. Instead, operators will relocate elsewhere. Texas has been touted as a place that could benefit from the new restrictions in China, thanks to its relatively lax regulatory environment and cheap electricity.

This story was first published in our daily newsletter, The Download. Sign up to get the most significant goings-on in tech delivered to your inbox, every morning.

Keep Reading

Most Popular

conceptual illustration of a heart with an arrow going in on one side and a cursor coming out on the other
conceptual illustration of a heart with an arrow going in on one side and a cursor coming out on the other

Forget dating apps: Here’s how the net’s newest matchmakers help you find love

Fed up with apps, people looking for romance are finding inspiration on Twitter, TikTok—and even email newsletters.

computation concept
computation concept

How AI is reinventing what computers are

Three key ways artificial intelligence is changing what it means to compute.

still from Embodied Intelligence video
still from Embodied Intelligence video

These weird virtual creatures evolve their bodies to solve problems

They show how intelligence and body plans are closely linked—and could unlock AI for robots.

We reviewed three at-home covid tests. The results were mixed.

Over-the-counter coronavirus tests are finally available in the US. Some are more accurate and easier to use than others.

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.