This weekly roundup of reports from Mainland China, Taiwan, and Hong Kong makes an attempt to curate the trade’s most necessary information, together with influential initiatives, modifications within the regulatory panorama, and enterprise blockchain integrations.
Regulatory noise
On this week’s column, the Man in Shanghai is set to squeeze the entire regulatory noise into one part, in order to not waste an excessive amount of of your time. Let’s start.
It wasn’t a lot, only a warning from the Hebei Provincial authorities to announce it will put an finish to cryptocurrency mining within the area. That is largely a non-story, because it’s primarily simply restating a nationwide stage coverage that went into impact months in the past. Hebei was by no means a lot of a mining stronghold anyway, so the announcement is extra procedural than the rest. Mining operations will proceed to maneuver abroad whereas China goes by way of its unified push to change into carbon impartial.
For reference, China has 23 provinces, and near half have already restated their dedication to the nationwide coverage by saying that cryptocurrency mining wouldn’t be tolerated.
The Securities Occasions, a state-owned publication, ran a story warning the general public in regards to the bubble surrounding NFTs. This Shenzhen-based publication questioned the true financial worth of NFTs, a subject that many people have all questioned about at occasions. Nonetheless, the suspicion hasn’t stopped the pattern from spilling into much less mainstream artwork circles, the place NFT and metaverse-related occasions have gotten increasingly more well-liked.
Promoting shovels in a gold rush
Whereas mining in China could be tough, manufacturing mining machines is continuous to be fairly worthwhile. Canaan, one of many world’s largest producers of cryptocurrency mining {hardware}, announced its highest quarterly earnings to this point. The corporate’s Q2 financials confirmed that the corporate recorded over about $167.5 million in whole web income. This was probably pushed by the sharp improve in costs this spring, resulting in aggressive enlargement of mining services the world over. The subsequent spherical of quarterly financials will inform a deeper story, as traders will find out how badly aggressive laws by China have damage the trade. Zhang Nangeng, Chairman and Chief Govt Officer of Canaan stated:
“We delivered a outstanding efficiency within the second quarter of 2021. Regardless of surprising regulatory coverage dynamics and Bitcoin value volatility, we achieved record-high topline outcomes as we delivered a sturdy 5.9 million Thash/s of computing energy to our purchasers.”
Rounding up the buying and selling area
Quantity remained largely flat on exchanges like Huobi and OKEx, because it has for the final 12 weeks. The final main spike got here in the course of the sell-off in early Might, across the time Chinese language regulators started their crackdown. Over this time, FTX has seen a robust improve in quantity, suggesting that some Chinese language customers could be connecting to exchanges that haven’t historically been a dominant participant within the Chinese language buying and selling area.
FIL stays well-liked on Huobi, ending within the prime 5 on Thursday’s 24-hr quantity chart. This token has maintained recognition amongst merchants in China, regardless of being about 50% beneath its all-time excessive from earlier this yr. ADA, SOL, and DOT have been property that confirmed up excessive on OKEx quantity charts, which mirrored world quantity distributions. Talking of Solana, Chinese language customers on Weibo reacted strongly to the community going offline on Wednesday, with some criticizing the community’s decentralization. Dialogue broke out about whether or not Ethereum’s early technical points have been similar to this occasion, proving that Solana and Ethereum maxis will disagree in any tradition, whatever the language.
Unleashing the eCNY
The central financial institution digital forex created by the Chinese language federal financial institution is now being pushed out even additional, as well-liked app Meituan is providing roughly $1.50 in eCNY (digital yuan) to customers who open a ‘digital pockets’ and use its providers.
Meituan is most generally identified for its shiny yellow meals supply service and shared bikes, which might be discovered on most metropolis streets. The marketing campaign is supposed to encourage low-carbon residing, and is open to 9 pilot cities together with Beijing, Shanghai, Shenzhen and Chengdu.
The eCNY, which initially was positioned as extra of an institutional remittance software for business banks, is now aggressively being pushed in direction of retail customers. Already, giant franchises like McDonalds and Zara show eCNY cost indicators at point-of-sale counters throughout the nation. The present digital cost area is dominated by WeChat Pay and Alipay, however these two will probably have a tough time holding management of market share if the central authorities is all in favour of forcing eCNY into competing purposes.
Sarcastically, Meituan has a particular position in Chinese language cryptocurrency meme tradition. Token holders usually joke they are going to be pressured to work in meals supply every time the market crashes, resulting in the meme beneath.
On the finish of March, Meituan revealed it had round 570 million customers. Different monetary apps, together with banking apps, have already built-in the pockets providers into their merchandise.
