China Looks at Banning Bitcoin Mining: What's It Mean?

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In a sign of growing government pressure on the cryptocurrency sector, China wants to ban cryptocurrency mining.

Reuters reports China Wants to Ban Bitcoin Mining

The National Development and Reform Commission (NDRC) said on Monday it was seeking public opinions on a revised list of industries it wants to encourage, restrict or eliminate. The list was first published in 2011.

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.

It did not stipulate a target date or plan for how to eliminate bitcoin mining, meaning that such activities should be phased out immediately, the document said. The public has until May 7 to comment on the draft.

State-owned newspaper Securities Times said on Tuesday the draft list “distinctly reflects the attitude of the country’s industrial policy” toward the cryptocurrency industry.

Last week, the price of bitcoin soared nearly 20 percent in its best day since the height of the 2017 bubble, and breaking $5,000 for the first time since mid-November, though analysts and traders admitted they were puzzled by the surge.

What's It Mean for Cryptos?

I suspect nothing actually. It does not change my opinion one way or another.

The recent rally appears to be technical.

After a long huge plunge, traders believe the bottom may be in. I don't.

Mike "Mish" Shedlock

Comments (13)
No. 1-6
caradoc-again
caradoc-again

In a strange twist banning mining might just push up the speculative price. Supply was to be limited anyway but now rate of addition could be limited too. In turn that can make it more lucrative to mine outside China.

This smacks more of limiting hard to track cross border transactions out of Yuan - almost desperation on the part of the Chinese. Saying more about Chinese worries than Bitcoin future.

Only if the ban use of Bitcoin will it matter.

They might be trying to limit C02 or preparing for their own crypto currency and want to reduce competition.

Unintended consequences?

Bam_Man
Bam_Man

China has a capital flight problem. It's as simple as that.

CCR
CCR

I suspect it will mean higher crypto prices, not lower. We want what we can't have.

JonSellers
JonSellers

Many Chinese folks are natural gamblers. Part of the reason, I believe, for the success of their economy currently. They're willing to bet that taking on a pile of debt will pay off big in the end. But being a natural gambler, also leads to a lot of natural scammers. So the Chinese are also very good at making and selling things that aren't quite what they are supposed to be.

I tend to think the Chinese government has a difficult job of corralling the scams in the Chinese economy. Too many people getting ripped off ends up making the ChinCom government look bad. And there is no bigger scam than bitcoin.

abend237-04
abend237-04

Bitcoin is a symptom. The root cause of it's existence is the distrust of fiat currency.