China’s state planning agency, the National Development and Reform Commission (NDRC), has indicated an interest in banning cryptocurrency mining in the country through a notice published online in Mandarin.
The report stated that the NDRC will include cryptocurrency mining activities to a list of sectors that could be shut down based on their violation of local regulations, wastefulness, safety concerns or harmful contributions to the environment. The list includes more than 400 other industrial activities.
The list is part of the NDRC’s Catalogue for Guiding Industry Restructuring. The catalogue was issued in 2005, pointing out the activities and industries which are allowed to grow in the country or those that ought to be restricted or banned outright.
Reuters reported that the draft list has been open for public perusal since April 8, 2019, although the NDRC has not yet set a date for the elimination of cryptomining activities from the state. The draft list shows a distinct representation of the Chinese state’s views on certain industrial policies and activities, and an announcement on the NDRC’s official site claims that members of the general public now have until May 7 to provide their comments on the draft.
China was once seen as a crypto haven, thanks to the country’s abundance of mining hardware and cheap energy. But developments like this make it seem as if the country has grown cold toward industry.
Despite a blanket ban on ICOs in 2017, China has maintained dominance in the cryptomining sector, with some of the world’s biggest mining companies operating from China — most notably, Bitmain. The recent notice by the NDRC has been a long time coming.
Late last year, the Xinhua News Agency reported that a study showed the impact of carbon dioxide emissions on global warming and their potential to increase temperatures by 2ºC as soon as 2033.
A separate report also claimed that authorities had seized hundreds of mining computers, after discovering they were responsible for the abnormal electricity consumption and a potential threat to the proper functioning of local power grids.
In addition, the Leading Group of Internet Financial Risks Remediation called on local governments to direct mining companies to make an “orderly exit” from the market.
The Chinese government has been making massive moves to stem the growth of crypto-based firms in the country for a while. The People’s Bank of China made the historic decision to place a ban on all ICOs back in 2017 and, since then, crypto companies have had to walk on regulatory eggshells.
In January 2018, a report on Bloomberg revealed that the Chinese Central Bank seemed to plan a reduction of the power supplied to bitcoin miners, in a move aimed at forcing them out of the country.
The Beijing-based Bitmain remains one of the largest manufacturers of cryptomining hardware in the world. However, the company has had to endure a torrid two years after its profits and viability were hit hard by the effects of crypto winter.
If this reported ban is enacted, it would mean that Bitmain could lose its business in China, one of its largest markets. This may prompt the company to relocate its business, something that could be difficult given its recent office closures in North America and Europe.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.