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Beijing studies crypto mining energy usage, Chia Network gains traction

2021.05.06 Matthew Lam

Beijing authorities probed cryptocurrency mining operations' energy consumption as Bram Cohen-led Chia Project gains popularity among Chinese traders.

Cryptocurrency mining operations were at the center of the discussion in the Chinese blockchain sphere this week after the Beijing Municipal Bureau of Economy and Information Technology reportedly conducted data checks to assess the energy consumption of such businesses in China.

In other news, Chia Network — a blockchain platform founded by BitTorrent inventor Bram Cohen — began live trading for its native token, XCH, on May 3. The protocol is reminiscent of Filecoin and is gaining traction among traders.

On the digital currency front, United States Federal Reserve Chairman Jerome Powell stressed that the U.S. is not racing against China to launch a central bank digital currency.

Here's everything you may have missed regarding these stories, and more, in this week's edition of China Market Watch from OKEx Insights. 

Beijing authorities investigate crypto mining energy usage

The Beijing Municipal Bureau of Economy and Information Technology reportedly sent out emergency notices to data centers — asking them to report any businesses related to cryptocurrency mining.

Data centers were required to report mining businesses' energy consumption metrics.

Key takeaways

  • The bureau conducted the probe in an effort to understand the energy consumption impact of cryptocurrency mining operations. The bureau has not published the results of the investigation.
  • Prior to the energy probe, the Chinese government attempted to regulate the cryptocurrency mining industry by shutting down mining farms in Inner Mongolia.

Chia Network gains popularity among Chinese traders

Chia Network enabled trading and transaction services for its native token, XCH, on May 3 — gaining widespread attention among the Chinese trading community.

XCH is listed for trading on OKEx and other cryptocurrency exchanges. It currently holds a daily trading volume of over $140 million, as of the time of this writing.

Key takeaways

  • Chia Network's popularity is reminiscent of the recent Filecoin craze in China. It is a new player in the decentralized-storage market, as it allocates unused hard drive space to improve storage efficiency.
  • The protocol has been popular among Chinese miners for the past two weeks, and they have been purchasing hard drives to participate in mining on the Chia Network. This participation has driven up the price of various enterprise-grade hard drives. 
Over 88% of XCH is traded via Chinese cryptocurrency exchange CITEX. Source: Feixiaohao.com

Fed: U.S. not interested in racing China to CBDC

During a press conference on April 28, Federal Reserve Chairman Jerome Powell reiterated that the United States would not race China to develop a central bank digital currency.

Powell is not concerned with being the first to implement a CBDC. Rather, he claimed the focus should be on "getting it right."

Key takeaways

  • The Federal Reserve appears most interested in studying the technological and political impact of a CBDC before developing one.
  • Powell believes China's digital currency, DCEP, does not escalate global competition for fiat currencies.

OKEx Insights presents market analyses, in-depth features, original research & curated news from crypto professionals. 

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.