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China’s National Development and Reform Commission had added the mining of bitcoin and other cryptocurrencies to a list of industrial activities that the country wants to eliminate. Photo: Shutterstock

China puts cryptocurrency mining on industrial blacklist in final step to eliminate the activity

  • The National Development and Reform Commission has added cryptocurrency mining to a list of industries that China wants to abolish
  • This action could hammer the final nail in the coffin of cryptocurrency mining activities in China
China’s top economic planner is seeking to eliminate cryptocurrency mining activity in the country, months after a government crackdown that turned dozens of companies from model energy consumers into pariahs in the world’s second-largest economy.
The National Development and Reform Commission (NDRC) on Thursday added mining of bitcoin and other digital tokens to a blacklist of industrial activities that must be abandoned, as the country pushes to reach carbon neutrality by 2060.

It was the sole revision made by the NDRC in its review of the country’s latest Industrial Structure Adjustment Guidance Catalogue, which took effect in January last year. The catalogue divides domestic industries into three categories: those that should be encouraged, restricted and eliminated.

The agency is soliciting public opinion on the revision through November 21.

Other activities on China’s industrial blacklist include manufacturing disposable dinnerware made of plastic foam and disposable cotton bud made of plastic, as well as coal mining at nature reserves, tourist attractions or protected drinking water source zones.

A technician inspects bitcoin mining machines at a facility in Inner Mongolia on August 11, 2017. Before Beijing’s crackdown earlier this year, China accounted for two-thirds of global bitcoin mining activity. Photo: Bloomberg
The NDRC’s action could hammer the final nail in the coffin of cryptocurrency mining in China, following a months-long campaign that prompted these power-intensive mining enterprises to hastily flee the country and relocate overseas such as in North America and Central Asia.
The agency initially announced in September that it was putting cryptocurrency mining into the elimination category, which means an immediate ban on new investments, business restrictions and a road map for eventual shutdown.
That came on the same day the People’s Bank of China announced an intensified crackdown on cryptocurrency trading and financing, warning that any foreign exchange that provided services to Chinese citizens through the internet was engaging in illegal financial activities.

Those moves redoubled the country’s efforts to remove deeply buried risk within its financial system and proceed with an ambitious energy-saving and emissions-cutting campaign.

Bitcoin mining in China drops to zero, as US becomes top market

Nasdaq-listed Canaan Creative, a Chinese manufacturer of cryptocurrency mining rigs, saw its share price edge down 0.46 per cent to US$8.68 on Thursday amid China’s continued campaign against the trading and mining of bitcoin and other digital tokens.

The crackdown in China has led to the US becoming the world’s largest cryptocurrency miner in terms of hash rate, a unit of measure for the bitcoin network’s processing power to verify transactions and create new cryptocurrencies.

The US contributed 35.4 per cent to the global hash rate in August, followed by Kazakhstan and Russia with 18.1 per cent and 11.2 per cent, respectively, according to the latest data from the Cambridge Bitcoin Electricity Consumption Index (CBECI).

China was still the world’s top location for bitcoin mining as recently as June, when it contributed to 34.3 per cent of the global hash rate, down from a peak of 65 per cent in April 2020. CBECI’s latest data for July and August shows China at 0 per cent.

This article appeared in the South China Morning Post print edition as: Beijing adds cryptocurrency mining to blacklist
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