China ready to ban crypto mining
The Chinese government was among the first ones to go after cryptocurrency exchanges and most of its moves towards banning initial coin offerings or crypto trading businesses were regarded as price-disruption factors that influenced the stability of the main crypto coins. Yet, ever since the cryptocurrency market went through the drastic correction back in 2018, China shifted its focus away from implementing crypto-regulatory measures, as the whole cryptocurrency market seemed to be dying. Now that the virtual coin prices show signs of resurgence, China is once again setting its sights on the crypto market, this time determined to ban crypto mining activities altogether.
Reuters reports that the Chinese National Development and Reform Commission (NDRC) is now revising its list of industries that should be encouraged, restricted or eliminated, and crypto mining is considered for immediate banning, as this type of activity is not yet seeing any regulations, plus it requires increasing amounts of energy. Even though the public can comment on this decision until May 7, an exact date for the ceasing of crypto mining activities was not yet revealed.
Such news would normally have an immediate negative impact on Bitcoin and other major cryptocoin prices, but, this time around, the prices remained stable. This could be related to the fact that the big Chinese mining companies can still move their entire operations abroad. Moreover, it looks like the Chinese government is actually looking to reshape the crypto mining industry and enforce strict regulations for it. According to Jehan Chu, managing partner at blockchain investment firm Kenetic, “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. […] China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the Internet."
China also has some of the biggest mining hardware makers, so companies like Bitmain and Canaan could be affected by these measures, unless they somehow modify their business plans to adapt to the new regulations.