Capital Calls: China’s bitcoin crackdown redux is welcome

Bitcoin sign is held outside Hong Kong's first bitcoin retail store during its opening, in Hong Kong
A bitcoin sign is held outside Hong Kong's first bitcoin retail store during its opening, in Hong Kong February 28, 2014. REUTERS/Bobby Yip

HONG KONG, May 25 (Reuters Breakingviews) - Concise insights on global finance.

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DEVOUTLY TO BE WISH'D. Beijing is reviving its distrust of cryptocurrencies. In 2017 it shut down domestic exchanges, but stopped short of making it illegal to own bitcoin and left miners alone. Now they too are being forced to shut down read more , partly because bitcoin production consumes 128 terawatt hours of energy per year. Chinese regulators with experience fighting speculation in exotic assets like egg futures and ornamental walnuts are also trying to stop financial institutions from dabbling in crypto assets, which are particularly risky as they evade capital controls. As with the prior crackdown, decision-makers in Beijing have set off a double-digit drop in bitcoin’s value read more .

Suspicions about crypto-currencies’ economic utility look validated read more . It’s unclear how long it will take to migrate the 65% of production capacity currently in China to other locations, so the market could remain unstable. Yet those who like trading them might appreciate how decoupling bitcoin from Beijing’s whims will reduce volatility. For fans and critics alike, there’s plenty of upside to this crash. (By Pete Sweeney)

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Earlier in Capital Calls:

Congress seems relaxed over SPACs read more

“Friends” reunion bookends AT&T too read more

Latest shale deal worse than none read more

Total makes good amuse-bouche for governance rejig read more

Greek bank relaunch relies on same old fuel source read more

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