Daily Management Review

China Seeking To End Bitcoin Mining In The Country


China Seeking To End Bitcoin Mining In The Country
Bitcoin mining is being sought to be banned in China by the state planner of the country. Reports based on a draft list of industrial activities that the agency has drawn up which it wants to stop stated that this was the latest signal of pressure that the cryptocurrency sector in the country was being put under by the Chinese government.
Mining is of bitcoin and other cryptocurrencies is quite popular and rampant in China and it is the largest market for related computer hardware designed specifically for that purpose. Such activity however had been red flagged by regulators on earlier occasions also.
Public opinions were being sought on a revised list of industries that would be encouraged, restricted or eliminated by the National Development and Reform Commission (NDRC), the agency said on Monday.
The revision of the draft was recently done to include cryptocurrency mining, which also included mining for bitcoin. The list has more than 450 other activities related to other industries that the NDRC believes required phasing out since such activities did not conform to the relevant laws and regulations and were potentially unsafe. The agency also feels that such activities also wasted resources and\or polluted the environment.
No specific date or plan for the phasing out of bitcoin mining was announced by the agency which indicates that the ban on cryptocurrnecy mining should be imposed immediately according to the document. The agency would keep the suggestions from public open till May 7.
The draft list “distinctly reflects the attitude of the country’s industrial policy” toward the cryptocurrency industry, said State-owned newspaper Securities Times on Tuesday.
“The NDRC’s move is in line overall with China’s desire to control different layers of the rapidly growing crypto industry, and does not yet signal a major shift in policy,” said Jehan Chu, managing partner at blockchain investment firm Kenetic.
“I believe China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the Internet.”
According to other bitcoin traders was quoted in media saying that they were not surprised by the government’s move.
“Bitcoin mining wastes a lot of electricity,” one Chinese bitcoin trader told the media but did not want to disclose identity because of the sensitivity of the situation.
Since 2017, when the Chinese regulators began a crackdown on initial coin offerings and closed own a number of Chinese cryptocurrency trading exchanges, there has been heavy scrutiny of the cryptocurrency sector in China.
Many of the cryptocurrency mining firms had to find bases elsewhere because of limitations being imposed on them in China by regulators. According to a Cambridge University study released in December, the Asia-Pacific region accounts for almost half of bitcoin mining pools. These are essentially groups of individuals who get together to reap benefits of economies of scale.
“Half of the network is probably located in China,” said Alex de Vries, a consultant with PwC in Amsterdam who specializes on blockchain and researches cryptocurrency mining. There is only about several hundred of crypto mining facilities in the world, he added.