Xiangtai Food Co. Ltd., a Chinese food company has through its US subsidiary bought 686 spot bitcoin miners. Could this move spell danger for the company in its home country China?
Xiangtai Food Co., Ltd., a Nasdaq-listed Chinese food company, has purchased 686 spot Bitcoin miners worth $6 million through its SonicHash LLC subsidiary in the United States.
While mining operations would continue in New York, the fact that the Chinese government has put an outright ban on cryptocurrency enterprises could cause problems for the company at home.
The newly purchased miners should be delivered to the Company’s mining site in Carthage, NY, in two to three weeks by the end of January 2022. As a result, once all of the miners are up and running, the Company’s total mining capacity is expected to be 1,428 Bitcoin miners, producing around 132.2 PH/s.
The Company intends to make around US$11 million in revenue and US$7.7 million in cash contribution margin for the first year, based on Bitcoin’s average price of US$49,628/BTC for the previous month.
A Beijing District Court recently dismissed a plaintiff’s request for compensation from a Bitcoin mining company for losses incurred on his investment. The lawsuit was dismissed by the court since mining is an illegal activity in China.
While China’s tough stance on cryptocurrencies is nothing new, the country has banned cryptocurrencies more than a dozen times in the last decade.
China’s CBDC (e-CNY) progress
The Beijing administration, on the other hand, is now aiming to speed up the official public introduction of the digital yuan. Many believe China is targeting the Winter Olympic launch for e-CNY since the entire world will be watching.
China launched CBDC research and development in 2014, when most countries were still unfamiliar with Bitcoin and the entire crypto sector. The digital yuan was finished in late 2019 and the government has been evaluating its application in various areas since then.
The original application of the digital yuan was for government employees’ travel allowances, which was eventually expanded to encompass a variety of other sectors and provinces.
WeChat, the world’s most popular social messaging and payment app with over a billion users, said yesterday that it would accept e-CNY payments on its platform.
