The Chinese government looks to be considering a blanket ban on mining Bitcoin and other cryptocurrencies.
China’s top economic planning agency, the National Development and Reform Commission (NDRC), publishes a list detailing industries that the commission seeks to support, eliminate or restrict. Last week, the NDRC published their latest draft list online, which includes crypto mining as one of the industries that could potentially be phased out.
The agency also cited reasons for the inclusion of cryptocurrency mining on the list. The main reason is that the industry consumes too much power, leading to pollution and wasted resources. China is the world-leading market for computer hardware designed for crypto mining. This is despite cryptocurrencies falling under legal and regulatory grey areas in China in the recent past.
State-run news agencies have previously reported on authorities seizing hundreds of mining computers in China. The confiscations followed reports that abnormal electric consumption was affecting the operations of local power grids.
Other reasons cited are the failure by miners to obey regulations and lack of safe production conditions. The NDRC is currently seeking the opinion of the public on the revised list of industries, which includes more than 400 industries.
The Chinese public is free to comment on the draft list until May 7, 2019, when it will be finalized.
It is worth noting that the economic planning agency has not specified any implementation dates. The commission is yet to put forth a plan for the elimination of the said industries. As such, it may be safe to assume that Bitcoin mining will not be phased out immediately.
China’s Stance on Cryptocurrency
This sudden move by the Chinese authorities on cryptocurrencies is likely to spread some fear and doubts within the industry. China has always expressed adversarial stances regarding cryptocurrencies. The country has previously demonstrated capabilities to influence the field significantly.
In September 2017, Chinese authorities put out a series of restrictive regulations that severely affected cryptocurrency activities.
The raft of regulations included a ban on fiat to Bitcoin exchanges and Initial Coin Offerings (ICOs). There were also further crackdowns on exchange-like services, where ICO websites were included in the Great Firewall, a term describing China’s censorship system. These events led to a slump in Bitcoin prices.
On Tuesday, the state-owned newspaper Securities Times stated that the revised draft list reflects the attitude that the Chinese government has towards the cryptocurrency industry.
So far, the published NDRC list seems to have no effect on the value of Bitcoin. The cryptocurrency has continued to trade at its highest levels since November last year (above $5,000).
Some commenters have pointed out that the NDRC guiding list, which is renewed every few years, has had minimal impact on the industries to be phased out. Others noted that there are some items on the 2019 list that were supposed to be eliminated in 2006.
Nonetheless, the blanket ban would deal a great blow to the many Chinese companies and individuals that have invested in the cryptocurrency mining industry.