China Wants to Ban Bitcoin Mining

The China Development and Reform Commission (NDRC) announced yesterday the “Industrial Structure Adjustment Guidance Catalogue (2019, Draft for Soliciting Opinions, hereinafter referred to as the catalog), which divided the industry into three categories: encouragement, restriction, and elimination. Mining activities, that is, the production process of virtual currency such as bitcoin, was listed in the elimination category.

The catalog states that the elimination category includes outdated production process equipment and products that cause serious pollution, or environmental, occupational health and safety, and fail to meet national standards. Some of the industries have indicated the deadlines for elimination, while those that do not have a specified period, according to the document, have been explicitly eliminated or immediately eliminated.

Mining is classified in the catalog as “backward production process equipment” and its projects are not marked with a phase-out period or related plans. Some people in the industry believe that the NDRC’s current approach may hit the mainland’s leading position in global bitcoin mining, and the industry may even be in a small interest in 2021.

As for big data, cloud computing, information technology services, and blockchains allowed by the state, it is covered in the information industry and is considered as one of the encouraged development projects. This also reflects the Chinese government’s policy stance, that is, that blockchain is an area of encouragement.