The attitude of the Chinese government towards crypto cannot change significantly in the short term, according to an expert.
Ivan Plantonov, an analyst at Chinese-led international information service provider and investment research firm, EqualOcean, told on April 29 that he does not expect the Chinese government to change its stance towards cryptocurrencies too rapidly.
He expressed the stance of his company:
“We don’t think that China’s attitude toward cryptocurrencies can change significantly in the short term. At the moment, the country is mostly emphasizing […] industrial and business applications of DLT. “
Still, Plantonov admitted that the recent measures taken by Chinese officials are “ probably the first time since 2018 when the local administration directly supports blockchain mining during high-flow seasons.” He explained that the change was initiated by Chinese President Xi Jinping’s call for the country to accelerate the adoption of blockchain technology:
“After the October announcement, which put forward blockchain as a national focus of innovation, the technology has been penetrating different layers of the Chinese government.”
Plantonov explained that Sichuan “has been a mining powerhouse for years”. He states that the region is economically underdeveloped, but has a lot of natural resources. Because of this, he believes crypto mining to be a great opportunity for the province:
“Mining is somewhat of a ‘gold mine’ opportunity they don’t want to miss. Now, under the blockchain-friendly climate provided by the central government, the pain points in the field are expected to be solved and the market is likely to be expanding gradually.”
Lastly, while Plantonov admitted that mining is clearly a part of blockchain technology, he believes it will still see conflicts with the local administration over the next few years:
“As the two (blockchain technology and mining) always go hand-in-hand, the sphere is projected to remain vulnerable over the next few years, with a certain amount of conflicts around this issue.”
China is a major player in the cryptocurrency mining industry. A late 2019 report showed that Chinese Bitcoin miners at the time were responsible for as much as 66% of the global hash rate, with 54% coming from just Sichuan.
Chinese cryptocurrency mining hardware producer, Bitmain, earned over $300 million in profit in the first four months of 2020.