China Moves to Eliminate Its Crypto Mining Industry
The Chinese government is reportedly moving to ban cryptocurrency mining activities within the country.
According to a recent report by the South China Morning Post, The National Development and Reform Commission (NDRC) unveiled amendments Monday to the guidance for the country’s industrial structure, with crypto mining categorized as a sector that should be eliminated immediately — although the list is open for public consultation until May 7.
The decision is based on rules enacted by China’s cabinet in 2005 which allow the government to essentially squeeze out undesirable industries — typically those perceived to waste energy or pollute — by labeling them for elimination. Once labeled, investments and loans in the industry are banned and the manufacture, use and sale of products in that category are prohibited. Additionally, authorities can increase the cost of electricity for businesses within the labeled industries to help them go out of business, according to the SCMP report.
Is China’s Mining Dominance at an End? ⛏️
A restriction of industrial-scale mining activities within the country is likely to significantly change the global hashrate distribution for Bitcoin (BTC), as Chinese mining pools currently control more than 70% of the network’s collective hashrate.
“Bitcoin mining will no longer be dominated by China but [will] become more decentralized,” Michael Zhong, an analyst with Beijing-based crypto research firm TokenInsight, told the SCMP.
This news comes as interest in crypto has again begun to surge in China and the rest of the world. As we recently reported, investors in China are reportedly loading up on Bitcoin at a premium because of the multi-step process required to turn fiat into most cryptocurrencies in the country. Additionally, last week, “bitcoin” topped the list of hottest new keywords on Baidu, China’s version of Google.
More: China, home to the world’s biggest cryptocurrency mining farms, now wants to ban them completely
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.