Back in April 2019, China’s National Development and Reform Commission (NDRC) was considering restricting or eliminating the crypto mining industry. However, the latest guidance from NDRC no longer mentions crypto mining.
On April 9, Reuters reported that the NDRC had announced on April 8 that it was “seeking public opinions on a revised list of industries it wants to encourage, restrict or eliminate”; this list, which is known as “Guiding Catalogue for the Adjustment of Industrial Structure”, has been issued since 2005.
The Guiding Catalogue is “a document supplementary” to the “Interim Regulation on Promoting the Adjustment of Industrial Structure”. When it was first issued, it covered “more than 20 industries that include agriculture, water conservancy, coal, power, transportation, information industry, iron and steel, nonferrous metals, petrochemical industry, building materials, machinery, light and textile industries, service industry, environmental and ecological protection, conservation and comprehensive use of resources, and etc,” and in total, there were “539 articles in the encouraged category, 190 in the restricted category and 399 in the to-be-eliminated category.”
The Reuters report said that the draft version of the Guiding Catalogue had added cryptocurrency mining to the “over 450 activities the NDRC said should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment.” Apparently, this document “did not stipulate a target date or plan for how to eliminate bitcoin mining, meaning that such activities should be phased out immediately.” Until May 7, it was possible for the public to submit their comments on the proposed changes to the list.
The report also quoted the state-owned Securities Times as stating that this draft list “distinctly reflects the attitude of the country’s industrial policy” toward the crypto industry.
Although the People’s Bank of China (PBoC) banned initial coin offerings (ICOs) in September 2017, until now, crypto mining has been legal, though discouraged due to the huge amount of energy it uses. For example, on 4 January 2018, South China Morning Post (SCMP) reported that, according to its unnamed sources, China aimed to “drive cryptocurrency miners out of business by limiting power consumption” because “Chinese officials are concerned that bitcoin miners are taking advantage of low power prices in some areas and affecting normal electricity use in some cases.” More interesting, this article also mentioned that the curbs ” will also involve other regulators” such as the NDRC.
However, it appears as though China is no longer interested in the idea of banning the crypto mining industry since the final version of the “Guiding Catalogue for the Adjustment of Industrial Structure” (last updated in 2011), which will go into effect on 1 January 2020, no longer says that crypto mining should be phased out.
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