Will China’s ‘digital yuan’ reinvent money as we know it?

What’s behind China’s latest crackdown on crypto? For some time, Beijing has banned bitcoin and other cryptocurrency exchanges from operating within its borders. Last week, the Chinese Communist party extended the ban to criminalise anyone dealing in crypto. ‘Virtual currency-related business activities are illegal,’ declared the People’s Bank of China. The CCP would ‘resolutely clamp down on virtual currency speculation… to safeguard people’s properties and maintain economic, financial and social order’.

China accounts for nearly half of the world’s crypto mining, a process in which high-powered computers are used to generate the digital currencies. Most of China’s crypto mining takes place in the country’s most remote regions, such as Inner Mongolia, where vast, hastily thrown-together warehouse complexes are packed with humming computers, swirling fans and tangled bunches of cables. This industry is extremely energy-intensive — it consumes more electricity than entire countries, including Switzerland, Austria and Singapore.