China’s Crypto Crackdown Moves To Target State-Run Mining Enterprises
Chinese authorities continue their on-going crack down on activities linked to cryptocurrencies which are considered illegal in the country. A leading economic planning body intends to go after large-scale crypto mining happening at government-operated industrial facilities.
China’s National Development and Reform Commission (NDRC) said earlier this week that it plans to focus on the “comprehensive rectification” of state-owned industrial enterprises involved in the crypto currency mining. The initiative is part of an ongoing crackdown on crypto-related operations that are banned in the country.
The commission referred to concerns over energy waste associated with crypto mining as well as financial activities linked to cryptocurrencies, and also stressed that these are considered illegal in China. Virtual currency does not have the same status as legal currency, the economic planning body said.
The NDRC pointed out that the disruption of crypto mining activities at state-owned companies will facilitate the optimization of China’s industrial structure. According to the commission, this will boost energy conservation and the reduction of emissions while helping the nation to achieve its carbon neutrality goals on schedule.
The NRDC said that crypto mining consumes a lot of energy. In order to discourage government-run entities from spending a lot of power on it, those that are now using subsidized electricity for crypto mining may face higher electricity rates in the future.
According to Meng Wei, a spokesperson of the NDRC, the commission intends to study the possibility of levying “punitive” tariffs as part of its preventive measures.
The National Development and Reform Commission has earlier this year proposed to add cryptocurrency mining to the country’s latest draft of the “Negative List for Market Access,” jointly released with the Chinese Ministry of Commerce. This would make the industry off-limits to investors. The 2020 edition of the list consists of 123 industries.
China orginally banned cryptocurrency trading back in 2017 but authorities did not interfere with crypto mining until earlier this year. In May, the State Council, the cabinet of ministers in Beijing, came down hard on the sector following President Xi Jinping’s pledge for the country to achieve carbon neutrality in the next four decades. In September, the People’s Bank of China reiterated its hardline stance on cryptocurrencies.
Together with the new infrastructure bill in U.S., which introduces new practices to crypto taxation, the latest announcement by the NDRC in China is likely to influence the crypto market, which shed billions of dollars in capitalization.
Major cryptocurrencies fell on Tuesday, when Bitcoin slipped below $60,000. At the time of writing BTC is trading at $59,905.
