Chinese Regulator Proposes Gradual Phasing Out Of Domestic Cryptocurrency Mining

Chinese Regulator Proposes Gradual Phasing Out Of Domestic Cryptocurrency Mining

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The Chinese government is seeking to further tighten the noose around its domestic cryptocurrency sector. The regulator has proposed adding crypto mining to the Negative List for Market access, an action that will outlaw all investments in the crypto sector.

The developments come amidst a severe crackdown on cryptocurrencies, although this is not the first time that China has banned crypto-related activities.

Outlawing Crypto Investments

On Friday, China’s National Development and Reform Commission (NDRC) announced that it was seeking to add crypto activities such as mining into the 2021 draft for Negative List for Market Access. If the draft for the proposed action successfully passes, then it will outlaw all investments in the area.

The list was made public by the NDRC, in collaboration with China’s Ministry of Commerce, and details economic sectors where investors are not allowed to invest. While the 2020 list included 123 industries, the current list has seen that number drop to 117.

Previous Bans On Crypto Mining

Members of the public can share their views on the negative draft list, with the NDRC inviting public suggestions between 8th October and 14th October. The developments are the latest in a long line of measures taken against the crypto space.

Chinese regulators had already banned trading and crypto mining earlier in the year, with the Chinese Central bank, the People’ Bank of China, terming transactions in crypto assets as an illegal activity.

Investors Seeking Safe Havens

With China’s central bank against cryptocurrency trading and terming crypto-related activities as illegal, Chinese banks and exchanges were no longer allowed to offer crypto-related services in the country, forcing investors to seek out other countries that had friendlier policies towards crypto.

A lot of investors have been looking at Hong Kong as a safe haven, and after Friday’s announcement, Powercrypto Holdings announced that it was moving its mining operations to the country.

A subsidiary of Powerbridge technologies, the firm specializes in Ethereum and Bitcoin mining and moves its inventory of 600 BTC and 2000 ETH mining machines to Hong Kong. The heavy-duty mining machines have hash rates of around 60 PH/s and 1000 GH/s, respectively.

Developing The E-Yuan

Before China’s crackdown on cryptocurrencies, the countries accounted for over 70% of the global crypto mining power, with the crypto markets weathering the storm as a result of the Chinese bans.

However, despite its strong actions against the crypto market, China has continued to foster the development of a digital Yuan and is one of the countries in the lead when it comes to the development of Central Bank Digital Currencies (CBDCs).

China’s central bank is taking significant steps towards the adoption of the e-yuan, with the bank planning to roll out the digital currency by February 2022. Currently, pilot studies are being carried out in 11 regions across the country.

The bank has also taken assistance from leading banks and tech firms to help during the pilot studies, with about $30 million worth of e-yuan already in circulation.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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