In a stunning turn of events, China’s National Development and Reform Commission (NDRC) is set to ban the bitcoin mining industry in the country. This can have a massive effect on the bitcoin market as China has become one of the largest hardware markets for bitcoin mining. Plus, the world’s largest bitcoin miners are based in China. A bitcoin mining ban would force these giants out of China or shut them down completely.
The report on the NDRC’s plan to ban bitcoin mining comes after the recent release of a list of industries that the government agency wants to encourage, restrict, and eliminate. First released in 2011, it has guided China’s economic plans for years now. The list has been modified several times over the years and it appears that the government is once again taking steps to reshape the Chinese economy with it.
The NDRC has already released a draft of the list of 450 industries that it would like to ban. Most prominent on the list is bitcoin mining. The industry has been in the gray area of regulation for years now and this ban can change that. If any industry gets added to this list, it means that the government either considers them unsafe, illegal or are a danger to the environment.
The fact that the bitcoin mining industry features on this list will not be a surprise to Chinese bitcoin miners. They cite the huge amounts of electricity that bitcoin mining consumes as one of the reasons why they think the government is cracking down.
The list did not say how and when the ban would be implemented. The NDRC has set the public consultation for the draft of the banned industries list to end on May 7 before the agency makes its final decision. This means that it is quite possible for the bitcoin mining industry ban to come into immediately effect.
This potential ban comes at a bad time for the bitcoin and cryptocurrency market as a whole. Bitcoin recently surged in value upwards by 20 percent. This also boosted the overall crypto market up as other cryptocurrencies followed bitcoin’s lead. However, the recent announcement from China has shaken the market a bit, with bitcoin recording a 1.4 percent drop.
China’s hard line stance on cryptocurrencies started back in 2017 when it first started banning initial coin offerings and closing down Chinese crypto exchanges. The country has tried in the past to limit cryptocurrency mining but a full ban would completely force some of the largest crypto miners in the world to move their base of operations to a more crypto-friendly country.