This Monday, China’s National Development and Reform Commission (NDRC) published a paper including undesirable economic activity that the Chinese government wants to see phased out. Perhaps most notably, Bitcoin mining is included among these activities.
China is the largest crypto mining market in the world
Furthermore, this comes as China is currently the largest market in the world for cryptocurrency mining hardware – even though this is an industry which has been mired by regulatory uncertainty.
The NDRC’s document includes a whopping 450 different activities that the agency is proposing should be eliminated or restricted. The motivation behind this is that the practices either conflict with local laws and regulations, are inherently unsafe, or lead to wasted resources and environmental pollution.
According to the NDRC, ”virtual currency mining activities [including] the production process of Bitcoin” should be shut down owing to the power consumption generated by this industry, which in turn could contribute to pollution.
This comes are China is trying hard to tackle pollution, which has become a widespread problem in the nation, with many Chinese cities oftentimes shrouded in smog. Although cryptocurrency mining is not the main culprit for this type of pollution, it would seem China is now trying to crack down on all polluting activities.
Moreover, it should be noted that this is only a suggestion as of yet. The Chinese public has been invited to comment on the paper up until May 7th. In addition to this, the NDRC has not revealed when this cryptocurrency ban – if passed – could be implemented.
This comes as the latest in a series of anti-crypto moves by the Chinese government
Nevertheless, Chinese Bitcoin traders are reportedly not surprised by this situation. The Chinese government has been hesitant to support cryptocurrencies, and has previously banned initial coin offerings, shut cryptocurrency trading exchanges, and imposed limits on cryptocurrency mining.
As such, this latest proposed restriction is not entirely unexpected. The Guardian reports that one Chinese Bitcoin trader, who wished to remain anonymous due to the somewhat controversial issue, noted that ”Bitcoin mining wastes a lot of energy.”
Furthermore, the Chinese Xinhua news agency released a report this past October, indicating that cryptocurrency mining could potentially become a major contributor to international carbon dioxide emissions which could subsequently accelerate global warming.
However, it is undoubtedly notable that Chinese cryptocurrency mining could be about to be banned. According to one report, a whopping 74% of the world’s cryptocurrency mining reportedly takes place in China.
Chinese crypto mining is currently largely coal-dependent
Moreover, these cryptocurrency mining farms are oftentimes located in coal-dependent regions with cheap electricity. Nonetheless, it should be noted that this decision – which is also awaiting public comment – would seem to be tied more to pollution than to cryptocurrencies.
As such, it is entirely possible – albeit unlikely – that the Chinese government could reverse stance on the matter when renewable energy becomes more prevalent in the country, or even choose to exclude renewable energy-powered cryptocurrency mining from this ban.
Nature Sustainability recently reported that cryptocurrency mining emits between 3 million and 15 million tons of carbon dioxide globally. To cut this amount by 74% would certainly be beneficial for the environment, and could potentially push cryptocurrency miners around the globe towards more sustainable sources of energy.
With that being said, however, it would likely represent a seismic shift for the cryptocurrency mining community. Currently, it remains to be seen what conclusion the Chinese agency comes to following the May 7th deadline for public comments.
Image Source: “Flickr”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.