China has expanded its reign on cryptocurrency with the latest move to completely ban Bitcoin and other digital currency mining to save the environment from the energy-intensive activity.
The country’s top economic planning body, National Development and Reform Commission (NDRC) last week said that one of the 450 industries they plan on eliminating is cryptocurrency mining since the activity “seriously wastes resources.”
“It is categorized as an industry that is not encouraged or allowed to expand, but it is not a ban,” said a former executive at BTCChina, China’s initial cryptocurrency exchange, Zhao Qianjie.
Despite ordering a ban on virtual currency trading and crypto-based fundraising called initial coin offering (ICO), China has been long known as a haven for crypto miners. But the activity has increased pressure to rein on the industry because of its environmental impact.
However, the NDRC has not yet set a time limit for the latest ban. The announcement also came several weeks after China said it would only tolerate high-capital investors who have more than $1 million to take part in security token offering (STO).
Analysts view China’s expanding regulations on virtual currencies are because of their fears the public could go around the government’s strict restrictions and limitations on how much money they can send to other countries and regions. The government also fears that Bitcoin will be used as an instrument in committing crimes.
“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,” stated Jehan Chu, managing partner Kinetic — blockchain’s investment firm.
“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,” she added.
Cryptocurrencies, despite a higher demand in the electricity system, is still one of the effective and efficient sources to earn money in China digitally. However, since last year, China is already seeking the banning of cryptocurrency in the country.
“Bitcoin mining wastes a lot of electricity,” said an anonymous bitcoin trader who opted to be unnamed due to the sensitivity of the issue.
Bitcoin miners earn through breaking and solving a mathematical problem that defines the basis for the currency. According to cryptocurrency firm Blockchain the prices of the currency, even though experiencing ups and downs, are currently above $5,000.
The committee will consider the public opinions and views before making a final decision on 7 May this year.