Ivan Plantonov, an analyst with China-led international investment research and information services company EqualOcean, told Cointelegraph on April 29 that he did not expect the Chinese government to change its stance on cryptocurrencies too quickly.
He expressed his company’s attitude:
“We do not believe that China’s stance on cryptocurrencies can change significantly in the short term. Currently, the country mainly emphasizes […] in industrial and commercial applications from DLT. “”
The Chinese government is opening up to cryptocurrency mining
Nevertheless, Plantonov admitted that recent measures by Chinese officials “are probably the first time since 2018 that local administration will directly support mining on the blockchain during the flood season.” He explained that the change began with Chinese President Xi Jinping’s call to the country to accelerate the adoption of blockchain technology:
“After the October announcement that blockchain technology was proposed as a national innovation focus, the technology has penetrated various layers of the Chinese government.”
Plantonov said Sichuan was “a mining power for years”. He claims that the region is economically underdeveloped but has many natural resources. This is why he believes cryptocurrency mining is a great opportunity for the province:
“Mining is a kind of ‘gold mine’ opportunity that you don’t want to miss. Given the favorable climate for blockchain technology by the central government, it is expected that critical issues in this area will be resolved and the market is likely to expand gradually.”
While Plantonov admitted that mining is clearly part of blockchain technology, he believes that there will continue to be conflicts with local government in the coming years:
“Since the two (blockchain technology and mining) always go hand in hand, the sphere is expected to remain vulnerable in the coming years, with some conflict over this issue.”
China is a major player in the cryptocurrency mining industry. A report in late 2019 showed that Chinese bitcoin miners were responsible for up to 66% of the world’s hash rate at the time, with 54% coming from Sichuan alone.
As Cointelegraph reported earlier today, Chinese hardware vendor Bitmain had a cryptocurrency mining mining profit of more than $ 300 million in the first four months of 2020.