China’s National Development and Reform Commission has recommended a list of revised rules to see the government phase out or restrict cryptocurrency mining including Bitcoin in the country.
Ban would impact greatly on the cryptocurrency market in China
Cryptocurrency mining has been proposed for close down because the NDRC considers it as a backward process that is a waste of resources. The proposal has caused jitters in the cryptocurrency sector making headlines across the globe mainly because China is the largest market in the world of Crypto mining activities. If the ban is implemented it will significantly affect cryptocurrencies like Bitcoin.
Economist and Crypto trade, Alex Kruger told TechNode that the news about the ban on cryptocurrency mining is being exaggerated considering this is not the first time China has cracked the whip on crypto mining.
In 2005, the Chinese authorities enacted rules banning its citizens from investing in eliminated industries.
According to the rules if the recommendation to ban crypto mining gets approved the cryptocurrency mining and manufacturing, as well as, sale of mining hardware will be an illegal activity in the country. This is a big setback to crypto miners who prefer China because of the low cost of electricity.
Power dynamics between authorities could enhance mining
Primitive Venture founding partner Dovey Wan stated that the recommendation does not reflect the Chinese government’s sentiment because such a move will actually impact on several businesses if the 2005 rules were to be followed. She said crypto mining is a regional business and local government incentives do not always conform to the objectives of NDRC. The power dynamics work well in enhancing crypto mining which will remain vibrant.
The People’s Bank of China in 2017 banned token sales and Initial Coin Offerings because they were disruptive to the stability of the economy. Since the ban, there has been a large decline in the nascent market in China,