The country with the world’s biggest cryptocurrency mining farms, China, aims to completely ban their operations, according to a new report issued by its top economic planning body.
The National Development and Reform Commission (NDRC) on Monday released proposed amendments to the list of industries that it wants to support, restrict or eliminate. Bitcoin and other digital currencies mining are listed among a swarm of other activities in the latter section of the updated document, which includes those seen as wasting resources or polluting the environment.
The proposed amendments will be available for public discussion until May 7. The regulator did not elaborate on a specific deadline to get rid of virtual currency mining, which could result in the immediate elimination of the sector, state-affiliated newspaper Global Times reported.
The move is seen as a new step in Beijing’s crackdown on crypto mining, despite the country dominance in the sphere. China is home to the largest cryptocurrency mining farms on the planet thanks to cheap electricity in some of its regions, such as coal-rich Xinjiang and Inner Mongolia as well as Yunnan and Sichuan provinces.
Thus, Chinese miners will have to move their facilities abroad. Some firms had already done so, like Beijing-based cryptocurrency mining hardware giant Bitmain, which relocated some of its facilities to the US.
Apart from shutting down the mining farms, the ban, if implemented, could be a huge blow to Chinese producers of mining rigs and other equipment for the industry.
The news comes as the price for the world’s most popular digital currency, bitcoin, has been steadily rising since the beginning of the month, setting an upward trend for other major digital currencies. On Monday, Bitcoin broke $5,300 mark before sliding to $5,200.
The news of China’s possible “elimination” of crypto mining had no immediate effect on the prices of tokens. However, its expected the ban may further have a major impact on the global market, analysts told by Global Times.
The People’s Bank of China banned initial coin offerings in 2017, and last year the country’s top internet-finance regulator reportedly issued a notice demanding companies quit the cryptocurrency business, saying that it poses a risk of speculation.
“There have already been some policies about phasing out bitcoin mining, but they have not been very effective as some local governments, in pursuit of GDP growth, continue to ignore the risks of bitcoin,” researcher at the Institute of Finance and Banking at the Chinese Academy of Social Sciences, Zhao Yao, told the Global Times. “The move by the NDRC, which determines industrial policies, carries much more weight.”