The Chinese government is considering a nationwide ban on bitcoin mining.
China and Bitcoin Enter the Ring
China and bitcoin have not always boasted strong relationships with each other. Last year, the country placed a ban on cryptocurrency trading and sought to limit exchange activity, but a ban on bitcoin mining would ultimately cancel out some of China’s biggest businesses. Large bitcoin mining companies such as Bitmain have done business in China for years, and with such a ban in force, it’s hard to say where they would go or what they would do.
Bitcoin, as of late, has been on something of a bullish roll. The currency recently spiked beyond the $5,000 mark for the first time in several months. Last November, the currency – which had been ailing since the beginning of 2018 – fell into the mid-$3,000 range, causing many enthusiasts to lose their cool. Many believed the currency would either never recover or would need a lot of time to do so.
The good news is that this isn’t the case, and even if bitcoin stays where it is for a while, the gains are in the books and traders are enjoying the largest window they’ve had in roughly five months. However, should China go through with its ban on mining, that could take a nasty toll on the currency’s price.
It seems that every few years, an agency known as China’s National Development and Reform Commission (NDRC) publishes a list of varying industries that it either wants to limit, discourage or restrict altogether because they are considered “unsafe, illegal or bad for the environment.” This latest list includes bitcoin mining as a potential option to “phase out.”
China virtually dominates the bitcoin mining scene, which suggests that the country’s economy could suffer heavily should it take such action against mining.
However, not everyone is convinced the ban will go through. Venture capitalist Dovey Wan is skeptical that China would ever go through with banning cryptocurrency mining, explaining on Twitter:
NDRC updates a new version of such proposals every other 3-5 years since early 2000. Items that should be eliminated by the end of 2006 are still in the 2011 and 2019 versions.
Does China Want to Control Crypto?
Another skeptic comes in the form of investor Jehan Chu, who explained in a statement:
The NDRC’s move is in line overall with China’s desire to control different layers of the rapidly growing crypto industry. I believe China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the internet.
There is additional speculation that China has no intention of setting the ban in stone, and that this is all simply an attempt to place crypto and blockchain applications in state control.