China says it wants to ban cryptocurrencies

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The main Chinese economic authority wants to ban the bitcoin mining industry, according to a list of industrial activities that the agency is trying to stop and which shows the strong government pressure to block the sector.

The National Development and Reform Commission, NDRC (中华人民共和国 国家 发展 和 改革 委员会) has compiled a list of 450 activities to be eradicated or favored in sectors that for one reason or another fail to follow national laws and regulations, are insecure or excessively pollute the environment.

The public will have time until May 7 to comment on the draft.

A date for the entry into force of the new regulations has not been indicated, nor is it indicated how this phase will take place.

According to the national daily Securities Times, the list “distinctly reflects the attitude of the country’s industrial policies” towards the cryptocurrency industry.

The entire crypto sector currencies is under government control since 2017, when regulators started banning some offers and started to close the first local trade exchanges.

China hosts some of the largest cryptocurrency extraction companies in the world – the data centers that host mining platforms – thanks to low-cost electricity in the coal-rich regions of Xinjiang and Inner Mongolia.

In recent months, Chinese miners have shifted their operations to the southern provinces of Yunnan and Sichuan to exploit even cheaper hydropower available during the rainy season.

If the new rules are enacted, Chinese miners will have to leave their bases in Yunnan and Sichuan and move operations to foreign countries, said Michael Zhong, an analyst at the Beijing TokenInsight cryptocurrency research company.

“Bitcoin mining will no longer be dominated by China, but it will become more decentralized, “he said.

China has also begun to restrict cryptocurrency extraction, forcing many companies, including some of the largest in the world, to find bases elsewhere.

 

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