China Wants To Oust All Cryptocurrency Mining Activity From the Country
Published on April 9, 2019
- China's NDRC proposes the banning of crypto-mining industry in China, including it to their blacklist.
- The agency highlights issues of energy waste, money laundering, and a heightened possibility for frauds.
- Some choose not to take the list too seriously, saying that NDRC is not a regulatory body.
The Chinese National Development Reform Commission (NDRC) has published a refreshed list of the industries that it considers to be wasting valuable resources, and cryptocurrency mining is among the new entries. This list is to be reviewed by the public and other relevant agencies and authorities who are expected to provide their feedback on the recommendations. Should the list remain unchanged, China will ban crypto-mining starting on May 7, 2019. This isn’t exactly coming out of the blue, as Chinese regulatory authorities have placed sincere efforts to shrink the crypto-mining industry as much as possible in the past two years.
In the start of the crypto-mining craze, China posed as a luring location to those who wanted to maximize their potential gains as it offered low electricity prices, cheap hardware vendors and low-cost labor. This resulted in a sudden boom for the crypto-mining industry in China, which accounted for about 70% of the global Bitcoin mining, and around 90% of the total trades. As these transactions take place outside of the established banking and governmental institutions, the Chinese authorities were quick to respond with a negative attitude. In 2017, they called local exchanges to halt cryptocurrency trading, and developed specific proposals to bash the industry in 2018.
Large Bitcoin miners in China received the message since January 2018 and started moving to countries like Iceland, Canada, Singapore, and the U.S. With the big players already out of China, Beijing looks to deal with the remaining crypto-mining companies who are still operating there. The regulators highlight the waste in energy that derives from the operation of these farms, and how they are playing an adverse role in the country’s economy. Possible frauds and money laundering are also among the main concerns that shade crypto-mining, as these arguments have been extensively used in China during these last couple of years.
Now, some people like the co-founder of Primitive Ventures, Dovey Wan, are not particularly worried about the updated NDRC list. As she points out on Tweeter, previous versions of the list have shown that NDRC has limited regulatory power, and merely acts as a consulting body.
for more context (🇨🇳regulatory landscape is fuzzy so hard to explain everything in tweet's length) - NDRC updates a new version of such proposal every other 3-5 years since early 2000. Items that should be eliminated by end of 2006 are still in the 2011 and 2019 versions pic.twitter.com/3v0dMvB8Tv
— Dovey "Rug the fiat" Wan (hiring) (@DoveyWan) April 9, 2019
Primitive Ventures is actually based in California, but they have invested in crypto-mining in China, so they will be among those who will be affected if a banning regulation comes into play.
Do you think there’s a chance we’ll see a crypto-mining ban in China? Let us know of your thoughts in the comments section below, and don’t hesitate to join the discussions on our socials as well, on Facebook and Twitter.
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