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China Attempts to Eliminate Cryptocurrency Mining

(Image credit: Wit Olszewsk/Shutterstock)

The Chinese National Development and Reform Commission (NDRC) said on Monday that it is seeking public opinions on a revised list of industries that it should encourage, restrict, or eliminate. The first version of NDRC's list appeared in 2011, and the revised list puts cryptocurrency mining on the chopping block for immediate removal.

There are over 450 other activities that the NDRC thinks it should phase out, due to them not adhering to relevant laws, wasting resources, or causing pollution.

The agency did not specify a date for when it would want cryptomining to end in the country, which implies it wants miners to stop their operations immediately once the ban is in place. The public still has until May 7 to comment on the ban.

China’s Attempt to Control Cryptocurrencies

According to Reuters, Jehan Chu, managing partner at blockchain investment firm Kenetic, told state-owned newspaper Securities Times that the Chinese government isn’t really trying to eliminate cryptocurrencies in the country for good.

“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,” the exec said. “I believe China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the Internet.”

China started its initial crackdown on cryptocurrency in 2017, when the government began banning initial coin offerings and shut down local cryptocurrency trading exchanges. It also forced some large cryptocurrency mining companies to move their headquarters elsewhere.

Two of the largest Bitcoin mining equipment makers, Bitmain and Canaan, were initially intending to go public and raise billions of dollars in Hong Kong, but the companies have unexpectedly let their initial public offerings lapse since making their announcements. According to Reuters’ sources, the Chinese government has been investigating these two companies’ business models.