Beijing Categorises Bitcoin Mining as “Eliminated” Industry

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The Chinese central government plans to officially including the mining of virtual currencies such as Bitcoin on its list of “eliminated” industries.

On 8 April China’s National Development and Reform Commission (NDRC) released the “Industrial Structural Adjustment Guidance Catalogue (2019 Edition – Draft for Solicitation of Opinions)” (产业结构调整指导目录(2019年本,征求意见稿)).

The Catalogue allocates economic activity into one of the three categories of “encouraged,” “restricted,” and “eliminated,” with the mining of Bitcoin and other forms of virtual currency included in the final group.

Bitcoin mining is expected to be subject to immediate elimination measures, given that the NDRC has not provided a timeframe or plan for elimination in the draft.

China first launched a crackdown on cryptocurrencies in September 2017, with a ban on initial coin offerings (ICO) followed by the mass closure of cryptocurrency platforms.

In January 2018 the Internet Financial Risk Specialist Rectification Work Leadership Team (互联网金融风险专项整治办工作领导小组) issued a notice to China’s provincial and municipal governments warning them that miners of virtual currencies were consuming copious resources as well as heightening speculative investment risk.

Chinese authorities subsequently called for regional governments to “actively guide enterprises within their jurisdiction to make an orderly withdrawal from mining activity,” via the adoption of measures with respect to power prices, land, taxation and environmental protection.

Local Chinese governments were required to provide regular monthly reports on miners within their jurisdiction as well as their efforts to prompt their withdrawal.

In June 2018 a slew of regional governments including Xinjiang, Yunnan, Guizhou and Inner Mongolia also issued notification documents calling for virtual currency mining companies to withdraw from activity.

A report from China Securities Journal indicates, however, that as of the end of 2018 many miners were still active in regional China, choosing to instead bill themselves as cloud computing or big data centres.

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