SHANGHAI (Reuters) – China's state planner wants to ban Bitcoin mining. According to a preliminary list of industrial activities, the agency is trying to stop government pressure on the crypto currency sector.
A small toy figure can be seen on representations of Bitcoin's virtual currency in this illustration image of December 26, 2017. REUTERS / Dado Ruvic / Illustration
China is the world's largest market for computer hardware developed for the mining of Bitcoin et al. Cryptocurrencies, even if such activities previously fell under a regulatory gray area.
The National Development and Reform Commission (NDRC) said Monday it seeks public opinion on a revised list of industries that want to encourage, limit or withdraw. The list was first published in 2011.
The draft revised list added cryptocurrency mining, including Bitcoin, to over 450 activities that should be discontinued under NDRC, as they did not abide by applicable laws and regulations, wasted resources, or polluted the environment.
No target date or plan has been set for eliminating bitcoin mining, which means that such activities should be stopped immediately, the document says. Until May 7, the public can comment on the draft.
The Securities Times state-owned newspaper said Tuesday that the draft list "clearly reflects the country's industrial policy" towards the cryptocurrency industry.
Last week, the price of Bitcoin rose nearly 20 percent on its best day since the bubble peaked in 2017. For the first time since mid-November, the mark of $ 5,000 broke. Analysts and traders admitted, however, that they were confused by the turmoil. [BitDate] Bitcoin traded at $ 5,190 on Tuesday.
The crypto currency sector has been severely tested in China since 2017 as regulators began banning initial coin deals and closing local crypto currency exchanges.
China also began to curtail the depletion of cryptocurrency and forced many companies – including some of the largest in the world – to find bases elsewhere.
Chinese companies are also among the largest producers of Bitcoin mining equipment, and last year three companies in Hong Kong had requested IPOs to raise billions of dollars.
The two largest companies, Bitmain Technologies, the world's largest manufacturer of bitcoin mining equipment, and Canaan Inc. have since suspended their applications.
The people who were familiar with the deals said that regulators in Hong Kong had many questions about the business models and perspectives of the companies.
According to the IPO Prospectus filed by Canaan last year, blockchain hardware sales, which were primarily intended for cryopreservation in China, amounted to 8.7 billion yuan in 2017 (1, $ 30 billion), which equates to 45 percent.
The prospectus forecasts that sales in China would rise to 35.6 billion yuan by 2020.
Report by Brenda Goh, additional coverage by Alun John in Hong Kong; Editing by Richard Borsuk and Sam Holmes