Whatever Happens, China’s Bitcoin Industry Keeps Moving Forward

     Will the Chinese government’s initiative to require the use of domestically produced software and hardware affect the development of the Bitcoin industry in the same way it has affected the banking and fintech sectors?

    China has been on this path to rebuild its information technology infrastructure for some time. The government and regulators have been pressing for the use of Chinese-made products to meet industry needs, rather than foreign (especially Western) ones.

     China is in a state of paranoia, just like the United States reacts to all Chinese moves (political, military, and technological). New regulations drafted by the China Insurance Regulatory Commission are reportedly requiring insurance companies to sort out homemade and foreign-made hardware and software. Although this is a draft regulation right now, there is a high chance that it will be passed in the near future.

     This is not the first time China has tried to crack down on the use of foreign IT products. Previously, the country's banking regulator, the China Banking Regulatory Commission (CBRC), issued a draft regulation on online banking that would have required companies to submit their source code and encryption keys to government authorities. The move was later terminated due to international opposition.

     China’s Bitcoin industry is large and well-known for its mining prowess. Currently, Chinese Bitcoin mining pools control the Bitcoin network and their hashrate. New government regulations on the use of domestically manufactured hardware and software may soon apply to other sectors as well. It is likely that Chinese authorities will soon force individuals and businesses to use Chinese-made hardware and software in order to be eligible for property and cyber insurance policies.

     Result if the regulation passes: China's bitcoin mining sector is likely to be unscathed, as most Chinese bitcoin mining farms currently use hardware that is manufactured in China. While Western governments and IT companies are lobbying to prevent the passage of the draft regulation to promote the use of domestic products, the United States and other countries have already banned the use of computers and networking products made by Lenovo, Huawei and ZTE in military and intelligence facilities.

     It feels like being controlled by the Western powers, although they are always cautious with each other. Thanks to self-sufficient mining tools and equipment, our Bitcoin industry will continue to move forward. Like China, Bitcoin mining application-specific integrated circuits (ASICs) and other hardware designed and manufactured by American and European companies are widely used around the world. Whether it is banned or not, hardware produced everywhere will continue to provide the processing power needed to mine Bitcoin.