The attitude of the Chinese government towards crypto is not likely to change significantly in the short term, according to an expert, Cointelegraph reported.
Ivan Plantonov, an analyst at EqualOcean, a Chinese-led international information service provider and investment research firm, said, “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 [distributed ledger technology]”
Still, Plantonov admitted that the recent measures taken by Chinese officials are “probably the first time since 2018 [that] the local administration directly supports blockchain mining during high-flow seasons.” He explained that the change was initiated by President Xi Jinping’s call for the country to accelerate the adoption of blockchain technology.
He said, “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 said the region is economically underdeveloped, but has a lot of natural resources. Because of this, he believes crypto mining is 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.