Throughout this week, false reports regarding the legality of bitcoin and cryptocurrency mining have emerged. Local sources have revealed that bitcoin mining is not banned as of yet.
Unconfirmed Reports and Rumors
Initially, Sichuan Electric Power Company, released an unconfirmed circular which claimed that the use of electricity to produce and mine bitcoin is illegal. Caijing, an independent news publication based in Beijing, first reported on the circular released by Sichuan Electric Power Company, and more media outlets followed.
CnLedger, a trusted news source of the Chinese cryptocurrency market, quickly debunked the report, after Sichuan Electric Power Company admitted that it had made several mistakes and included unverified claims on its circular.
“The head of that company has clarified that they made mistakes on the statement, as they are not a government administrative department, and have no rights to determine whether bitcoin mining is illegal,” wrote CnLedger.
According to the county electric power company in Sichuan, the firm did release a notice which explicitly described bitcoin mining as an illicit operation. But, an executive of the company stated that the circular was released in a hurry and that the company is not in a position to ban or restrict bitcoin mining.
“However, head of the company clarified to Caixin today that the notice was made in a hurry; it is not their role to determine whether bitcoin mining is against the law. Actually the company is not yet connected to national grid, and relies on local stations to get electricity,” added CnLedger.
Government and State-Owned News Publication Clarify
More importantly, state-owned business and finance news publication Caixin, revealed that the government has no intent of banning bitcoin mining or any activity surrounding cryptocurrency mining in the region as of yet.
Caixin’s report was particularly important and notable to the controversy surrounding a potential bitcoin mining ban in China as it has operated as the official press of the Chinese government. CnLedger explained that Caixin has communicated with the government, which announced that bitcoin is not illegal as of current. CnLedger revealed:
“Caixin also mentioned that technically these 6 stations are not qualified grid power supplier. So they are not allowed to the grid anyway. The electricity they produced is considered “wasted” power. Previously Caixin has also contacted those who are close to the regulators, and was told that currently there is no plan to forbid bitcoin mining.”
Conclusively, a premature and unverified circular of a country grid operator led to a series of false reports around the legality of bitcoin mining. So far, the government and state-owned press have evidently demonstrated that the country has no intentions to ban bitcoin mining.
In the upcoming months, several analysts predict the Chinese government to provide necessary regulatory frameworks around cryptocurrency trading and bitcoin mining. Businesses have not ruled out the possibility of cryptocurrency trading resumption, given that the Chinese government has emphasized the need for strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies for cryptocurrency exchanges.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:48 PM UTC
Credit: Source link