China

China’s Giant Ride-Hailing Service Didi to Pilot the Central Bank’s Digital Yuan

09/07/2020 by Idelto Editor

The Chinese government and the country’s central bank, the People’s Bank of China (PBoC), are currently in the midst of testing a digital yuan or central bank digital currency (CBDC). Now the Chinese ride-hailing corporation Didi Chuxing will be trialing the newly developed digital yuan in a “strategic partnership.”

Whether people want to believe it or not, the digital yuan is coming soon, and the PBoC has been steadily working on the project for years. Cryptocurrency enthusiasts have heard rumors about a digital yuan since 2014, but in 2020 that rumor is becoming more of a reality.

The last time news.Bitcoin.com reported on the subject, well known firms like McDonald’s, Starbucks, and Subway have been involved with testing the digital yuan. Additionally, those companies were joined by JD Supermarkets, Tencent, and Ant Financial. It was also rumored that Chinese government employees may soon be paid using the PBoC’s CBDC.

Now the ride-hailing giant Didi Chuxing has joined the PBoC and Chinese government officials behind the CBDC taskforce in a “strategic partnership.” The PBoC’s think tank will reportedly call the CBDC “DC/EP” (digital currency/electronic payment) and PBoC representatives have said that the DCEP experiment did very well during testing in Suzhou and the country’s Xiong’An shopping districts.

Didi Chuxing Technology Co is also at the forefront of the self-driving, ride-hailing car industry.

Didi Chuxing Technology Co, formerly named Didi Dache, is based in Beijing. In the recent DCEP partnership announcement, Didi refers to itself as “the world’s largest one-stop on-demand transportation platform.” The company with its founder Cheng Wei and 11,407 employees will be working directly with the DCEP project hands-on.

“Under PBOC’s overall DCEP strategy and operation timeline, Didi’s DCEP taskforce will design and implement pilot DCEP projects in accordance with rigorous safety, security, and governance standards,” Didi explained during the company’s latest announcement.

Didi Chuxing is vastly known as the “Uber of China,” and the company also offers ride hailing services in Latin America and Australia as well. The firm is valued at $56 billion to-date, and the company has roughly 550 million ride-hailing users across the globe.

The aim of Didi leveraging DCEP will help lay the foundations for the digital yuan. Despite recent testing with JD Supermarkets, Tencent, Ant Financial, Starbucks, Subway, and McDonald’s, the financial news outlet Bloomberg notes Didi Chuxing’s pilot “could be one of the first real-world applications of [DCEP].”

A representative from the PBoC said last April that the central bank hopes after the public beta testing completes, the bank can officially launch the digital yuan prior to the Beijing Winter Olympics scheduled for 2022. So far only a few other countries are in the midst of creating CBDCs, and just recently the U.S. has been discussing the “digital dollar.”

Sweden is currently working on an e-krona and Venezuela’s Socialist Party regime, run by Nicolas Maduro, minted the first nation-state issued CBDC called the “petro.” Despite the digital yuan being a rumor since 2014, it seems the Chinese central bank coin might just be the next nation-state cryptocurrency in line to launch.

What do you think about China’s DCEP working with Didi Chuxing? Let us know in the comments below.

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Escalating Bank Runs Spur Chinese Government to Require Approval for Large Cash Transactions

07/07/2020 by Idelto Editor

A series of bank runs has prompted the Chinese government to begin requiring approval for large cash deposits and withdrawals at commercial banks, starting with banks in a northern province. Recently, two bank runs happened within a week as people lost faith in financial institutions amid unprecedented economic contraction.

China’s Efforts to Prevent Bank Runs

China has launched a measure aimed at curbing bank runs. Starting July 1, residents of the northern province of Hebei are required to “apply for approval if they plan to make large cash deposits or withdrawals at commercial banks,” the South China Morning Post reported Sunday. The publication detailed:

The regulation comes after a series of bank runs in the past year at debt-laden small lenders and as an unprecedented pandemic-related economic contraction starts to take a toll.

Residents “will need to provide information about the source of deposits or the purpose of withdrawals for transactions over 100,000 yuan (US$14,162) for individuals, and 500,000 yuan for corporations,” the state-backed China Securities Journal described. “Applicants will have to give one day’s notice to the bank to make a withdrawal of this size or larger, and gain the branch’s approval of the registration information.”

This requirement will be expanded to banks in Zhejiang province and the city of Shenzhen in Guangdong province from October 1 for individual account transactions of more than 300,000 yuan and 200,000 yuan, respectively.

The regulation requires “every commercial bank to integrate their information systems to minimise the amount of reporting required by individual customers,” the Journal noted, claiming that this regulation primarily targets “transactions conducted with physical cash through quick, self-service deposit and withdrawal equipment that avoided monitoring.”

Many small lenders in China are facing problems such as rising number of non-performing loans, insufficient capital, and poor governance. Last month, runs on two small lenders happened within a week. The news outlet reported that customers mass-withdrew their money from Baoding in Hebei province and Yangquan in Shanxi province over concerns about the health of the banks. While China guarantees deposits of up to 500,000 yuan per bank, the publication conveyed that investments in wealth management products are not protected.

What do you think about China’s cash transaction measure to curb bank runs? Let us know in the comments section below.

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US Contract Miner Core Scientific Buys 17,600 Bitcoin Miners From Bitmain

30/06/2020 by Idelto Editor

U.S. contract mining firm Core Scientific has agreed on a deal to buy 17,600 mining rigs from Chinese bitcoin hardware maker Bitmain Technologies Inc.

The company is buying Bitmain’s next-generation bitcoin (BTC) miner, the Antminer S19, it said in a statement on June 29. The miners will be fully installed at data centers operated by Core Scientific in the U.S. over the next four months, it added.

Washington-based Core Scientific did not provide details about cost, but the deal might come to a total of between $30 million and $42 million. Each S19 machine is currently selling at $1,785 while the newer S19 Pro is going for $2,407, according to the Bitmain shop.

Core Scientific said that the purchase is on behalf of its institutional customers and for its own use. It also claims the deal to be the largest acquisition of S19 BTC miners by a single blockchain hosting company.

Company president and chief executive officer Kevin Turner commented:

Core Scientific has received and begun testing the first of Bitmain’s newest ASIC miners, and has seen material success in increasing existing hashrate to achieve a 110 TH/s ± 3%.

Bitmain confirmed the deal in a blog post. The Antminer 19 series uses the latest generation of SHA256 Application-Specific Integrated Circuits (ASICs) from Bitmain, making it more energy-efficient compared to previous models from the Beijing-based entity.

According to F2pool, a large global bitcoin mining network, the Antminer S19 model generates up to $3.03 of profit each day. The Antminer S19 Pro, Bitmain’s latest offering, makes a profit of $4.12 per day. The figures are based on an average electricity cost of $0.05 per kilowatt-hour (kWh).

The Antminer S19 has a computing power or hashrate of 95 terahash per second (TH/s) and power efficiency of 37.5 joules per terahash (J/TH). The Pro version comes with 110 TH/s and a power efficiency of 29.5 J/TH.

Bitcoin miners have been forced to look for more efficient mining equipment since the supply cut event of May 11, which slashed miner revenue by 50% from 12.5 to 6.25 BTC per block. The United States appears to be upping its game on this front.

What do you think about Core Scientific’s ambitions? Let us know in the comments section below.

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5 Chinese Banks Say Legal Crypto Traders’ Accounts Will Not Be Frozen as Police Widen Crackdown

15/06/2020 by Idelto Editor

Following reports that Chinese authorities are freezing bank accounts of cryptocurrency traders, five banks have reportedly clarified their policies. They confirmed that accounts with legal crypto transactions will not be frozen. However, some people claim that their accounts have been frozen without involvement in illegal activities.

Crypto Traders’ Bank Accounts Frozen

Chinese police have been freezing the bank accounts and bank cards of over-the-counter (OTC) cryptocurrency traders as they crack down on illicit activities involving cryptocurrencies. News.Bitcoin.com recently reported that about 4,000 bank accounts had been frozen in China’s Guangdong province. A few days later, local media reported that the police in Sichuan similarly froze the bank accounts of crypto traders and miners.

A China Times reporter asked five banks regarding their policies in freezing the bank accounts of customers with crypto transactions. China Merchants Bank, Bank of China, Agricultural Bank of China, China Construction Bank, and Industrial and Commercial Bank of China responded the same way. The news outlet conveyed on Saturday:

As long as the operation is legal, the channel is legal, the virtual currency source is legal, the page supports bank card service, bank card users’ funds will not be intentionally frozen unless it involves illegally related cases, such as money laundering and fraud.

Nonetheless, there are reports of people saying that they are not involved in any illegal activities but their bank accounts have been frozen. A woman told China Times that she used her bank card to purchase cryptocurrency on a large crypto exchange and her account was frozen a week later. “I was a little shocked at the time,” she said, insisting that she “did not participate in any illegal activities.” As she tried to get her account restored, her bank said, “the card was frozen by the police, so wait for the notification.” A bitcoin miner whose bank account was also recently frozen shared his story with the publication, stating: “I have been notified that I can unfreeze with my ID card and related information.”

China’s central bank, the People’s Bank of China (PBOC), has been increasing its anti-money-laundering efforts. According to local media, Chinese police have cracked down several large-scale money laundering cases involving cryptocurrency. While Chinese regulators closed down local crypto exchanges in September 2017, bitcoin and other cryptocurrencies remain legal in the country, as ruled by several Chinese courts.

Although banks claim that accounts showing legal transactions and operations will not be frozen, industry insiders recommend using a separate account to buy cryptocurrencies. “It is best not to use bank cards with important purposes to purchase cryptocurrencies, such as debit cards linked to mortgage loans [and] wages.”

What do you think about Chinese authorities freezing the bank accounts of crypto traders? Let us know in the comments section below.

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Bitmain’s Cofounder Accused of Hindering Next-Gen Bitcoin Mining Rig Shipments

14/06/2020 by Idelto Editor

On June 11, 2020, regional reports disclosed that the cofounder of Bitmain, Micree Zhan, is still battling with Jihan Wu in an ongoing feud. The quarrel is allegedly causing shipment problems for customers, as reports note that Zhan is prohibiting deliveries stemming from the company’s Shenzhen factory.

Bitmain Cofounder Micree Zhan Accused of Causing Mining Rig Shipment Delays Stemming from the Firm’s Shenzhen Factory

An account from the financial columnist, Vincent He, explains that the two cofounders of Bitmain continue to feud over the company’s operations. The report from China highlights that Bitmain’s internal issues may be delaying mining rig shipments for a number of customers. The report explains that Bitmain offers a coupon when delays happen, but “some buyers are disappointed.”

During the last week of May, news.Bitcoin.com reported on how regional sources disclosed that Micree Zhan was allegedly ousted. It was said that the cofounder was threatened with litigation if he interfered with company operations and was warned two times not to intervene with employees.

Following this move, new evidence suggests that Zhan took control over the official media account on June 10. The report also says that a new “HR” representative was “appointed by Micree Zhan.”

“Since Micree Zhan issued an open letter, at present, one-third of the employees have gone back to answer Micree’s call, mainly the employees of the [artifical intelligence] AI business,” Vincent He writes. “Through hindering the delivery of new miners, it is also [a] counterattack [by] Micree Zhan against the miner sales departments led by Jihan Wu. Up to now, the bargaining chips in Micree’s hands are Beijing Bitmian’s business license, official seal, and official media account.”

SHA256 Hashrates Remain High, While Four Out of Five of the World’s Top Mining Rigs Are Bitmain Manufactured Antminers

The recent issues follow Bitmain’s release of the Antminer T19 that processes at speeds of around 84 terahash per second (TH/s). At $0.04 per kilowatt-hour (kWh), the T19 is the fourth most powerful miner in the world out of the top five contenders.

In fact, Antminers represent four out of the five top mining rigs leaving only Microbt’s Whatsminer M3OS (86TH/s). The M3OS makes over $5 per day in BTC, while the Antminer T19 also makes around $5 per day at $0.04 per kWh at today’s BTC exchange rates.

The T19 is one of the newer models that may be affected by delayed shipments. Vincent He discussed the situation with Shi Pu, a bitcoin miner and Bitmain buyer, who said he was currently “angry and aggrieved.” According to statistics, the BTC network (SHA256) hashrate is holding strong at 107 exahash per second, and delayed shipments don’t seem to be affecting the current performance.

The Bitcoin Cash (BCH – SHA256) hashrate has increased since May 8, 2020, from 1.4EH/s to today’s 2.6EH/s. Similarly, Bitcoin SV (BSV – SHA256) hashrate has increased since April 15, 2020, from 1.4EH/s to 2.23EH/s today.

In terms of the overall SHA256 hashrate, mining operations are not experiencing any hashrate decline if there are any shipment delays. The Antminer S17 released in December and Antminer S19 released in May, seemingly shipped to destinations despite the Covid-19 delays that affected all the Chinese mining rig manufacturers and customers.

What do you think about the stories and quarrels involving Micree Zhan and Bitmain? Let us know in the comments below.

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