The Chinese government planning agency, National Development and Reform Commission (NDRC), published on April 7 a new version of the report that seeks to manage various types of industrial activities in order to deliver environmental sustainability and eliminate harmful activities.
Now, cryptocurrency mining is among the other 450 lines of activities, previously included in the list. With the government having a strict control over the China’s economy, this publication can be sign of the incoming doom for the Chinese crypto mining industry.
Importantly, three quarters of all crypto mining capacities are located in the country with miners flocking to regions, offering low prices on energy due to the wide use of hydro-power and coal.
There is no information as to how the government agencies will determine whether certain corporate or individual users consume energy in order to mine cryptocurrencies, but, evidently, an increased usage of electricity can be a valid reason for a follow-up on-site inspection, during which the mining equipment would be found.
China Crypto Ban
Some of the mining operations have already migrated to certain municipalities in Canada and Australia where miners also find cheap electricity. Presumably, should this decision go into effect, it will decimate any and all mining enterprises in China, wreaking havoc on the very foundation for security in cryptocurrencies, since it’s these very miners who help prevent 51% attacks and enable easy and low-fee value transfers around the world.
With the current growth trajectory in Bitcoin prices, traders are not sure about whether the news regarding a potential ban have had any significant effect on the bull run.
The announcement stipulated the comment period till May 7, during which all interested parties can make their views known. However, taking account of the hardline stance on decision-making in China, some experts see clear prospects for a blanket ban on crypto-mining across the whole of China. In a similar move, in 2017 China banned all ICOs and crypto exchanges, failing to recognize any potential benefits that these industries might present.
It’s quite possible that these changes won’t be implemented and it’s FUD.
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