Explainer | Why is China cracking down on cryptocurrencies?

Beijing seeks to strengthen its monetary hold and project its new official digital currency

The price of the world's most prominent crypto-currency Bitcoin has more than halved in the last two months after hitting a peak in mid-April. The second-most valuable crypto-currency, Ether, has seen a similar fall from its peak last month. China’s crackdown against crypto-currencies, which are those that aren’t sanctioned by a centralised authority and are secured by cryptography, is said to have a lot to do with the crashing of the value of crypto-currencies. In recent weeks, China has reportedly cracked down on crypto mining operations. The country has over the years accounted for a large percentage of the total crypto mining activity that takes place. In purpose, Bitcoin miners play a similar role to gold miners; they bring new Bitcoins into circulation. They get these as a reward for validating transactions, which require the successful computation of a mathematical puzzle. And these computations have become ever-increasingly complex, and therefore energy-intensive in recent years. Huge mining operations are now inevitable if one is to mine Bitcoins.