Reports emerged yesterday morning that the Chinese Government plans to ban bitcoin mining. The National Development and Reform Commission (NDRC), a macroeconomic management agency under the Chinese State Council, has published a list of 450 industrial activities it plans to encourage, restrict or eliminate. Bitcoin mining is in the “eliminate” category, Reuters reports.
The list has been sent out for public comments and the Commission hopes to receive feedback by May 7th. The reasons the Government wants to eliminate certain industrial activities vary from reasons such as – not compatible with relevant laws and regulations, unsafe, pollution of the environment, or resources are being wasted. One of the comments attached to bitcoin in the list mentions that “the industry contributes to pollution and wastes resources”.
This news should not come as a surprise as the list reflects the attitude of the Chinese Government towards cryptocurrency industry in general. Two years ago, China banned the initial coin offerings and closed down some local cryptocurrency trading exchanges.
“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.
In case the plan materialized, it could prove to be a huge blow for the entire crypto industry. Almost half of the bitcoin mining pools are located in the Asia-Pacific, a study from Cambridge University revealed.
“Half of the network is probably located in China,” said Alex de Vries, analyst specialized on blockchain and researches cryptocurrency mining, currently with PwC.
The Commission, previously known as the State Planning Commission, has broad administrative and planning control over the Chinese economy. The current chairman, He Lifeng, is an influential party member and one of the key figures in the context of economic reform policies.