Authorities in China are continuing to tighten down on cryptocurrencies-related activity that they deem illicit. The country’s main economic planning agency has made it apparent that it plans to go after large-scale cryptocurrency mining at government-run industrial sites.
China’s National Development and Reform Commission (NDRC) declared on Tuesday that it intends to focus on “comprehensive rectification” of state-run industrial businesses involved in digital currency extraction. The campaign is part of a broader crackdown on crypto-related activities, which are illegal in the People’s Republic.
The economic planner expressed worries about the energy loss connected with crypto mining as well as financial activity related to cryptocurrencies, which are both prohibited in China. The committee highlighted that virtual money does not have the same status as legal cash, as reported by CGTN, the foreign branch of CCTV, the national broadcaster.
According to the NDRC, the interruption of crypto mining operations at state-owned enterprises would aid in the optimization of China’s industrial structure. The commission also believes that this will increase energy saving and emissions reductions, allowing the country to meet its carbon neutrality targets on time.
The planning committee went on to say that digital coin minting requires a lot of energy. Those who are now utilizing subsidized electricity for crypto mining may face higher electricity costs in the future in order to deter government-run entities from spending a lot of power on it. Meng Wei, an NDRC official, stated during a news briefing that the commission aims to investigate the prospect of levying “punitive” tariffs as part of its preventative measures.
The National Development and Reform Commission recommended in early October to include cryptocurrency mining in the country’s newest draft of the “Negative List for Market Access,” which was produced in collaboration with the Chinese Ministry of Commerce. Investors would be barred from the business as a result of the action. According to Bitcoin.com News, the 2020 version of the list includes 123 industries.
Although China prohibited bitcoin trading in 2017, officials did not intervene with cryptocurrency mining until early this year. Following President Xi Jinping’s commitment to attain carbon neutrality in the next four decades, the State Council, Beijing’s council of ministers, tightened down on the industry in May. The People’s Bank of China restated its stance on cryptocurrencies in September.
Along with the signing of the infrastructure bill by US President Joe Biden, which addresses crypto taxes, the current declaration by China’s NDRC is likely to have affected cryptocurrency markets, which have lost billions of dollars in valuation.