China will ban cryptomining to prevent wastage of resources

3D Render of Crypto Currency Mining

2 min read

Yesterday, China’s National Development and Reform Commission (NDRC) published a proposal to ban cryptocurrency mining with reason stating that crypto mining is a waste of valuable resources. The team is waiting for public feedback over this proposal and they also indicated that “the crypto-mining ban could take effect as soon as they’re formally issued”, the Bloomberg reports. The proposal also includes a “revised list–first published in 2011–of industries it wants to encourage, restrict or eliminate”, Reuters reports. The public can comment on the draft latest by May 7.

Cryptocurrencies such as Bitcoin use specialized computers that use a huge amount of energy. According to the South China Morning Post, China’s coal-rich regions, Xinjiang and Inner Mongolia have become popular destinations for crypto-miners looking for cheap electricity.

“It’s estimated that as much as 74 percent of global crypto mining is occurring in China, place where it’s also the most carbon-intensive”, Gizmodo reports. A recent report in Nature Sustainability says crypto mining emits anywhere between 3 million and 15 million tons of carbon dioxide globally.

In 2017, China banned initial coin offerings and also put a halt to virtual currency trading. In 2018, Chinese officials outlined proposals to discourage crypto mining. Jehan Chu, a managing partner at blockchain investment firm Kenetic, said, “The 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.”

According to Reuters, “The draft for a revised list added cryptocurrency mining, including that of bitcoin, to more than 450 activities the NDRC said should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment.”

An executive who works closely with Chinese mining firms told Wired, “although the ban was widely expected to move forward, miners expect it will take years for the government to fully rein in their operations.”

To know more on this news in detail, head over to Bloomberg.