Cryptocurrency mining has become the latest target for the Chinese government seeking to phase out industries considered a drag on the country’s economy.
In China, the National Development and Reform Commission (NDRC) is tasked with studying the nation’s economy and guiding its future development — in part by listing industries it wants to encourage, restrict, or discontinue.
In a typical Bitcoin mining operation, powerful banks of computers are dedicated to crunching out "blockchain" numbers that serve absolutely no purpose, but have value because people think they do. Nearly three quarters of cryptocurrencies are mined in China, generating anywhere up to 10 million tons of carbon dioxide, according to a recent study in Nature Sustainability.
China has been considering a Bitcoin mining ban since last year. It reportedly asked local governments to encourage firms to quit the business by jacking up power prices and and issuing stronger environmental rules. The government is concerned not just about pollution, but the havoc that could be triggered by investors who lose money speculating in cryptocurrency.
If the new rules come into force, Chinese miners will be forced to leave their operations -- often located close to coal mines with cheap power -- and move to foreign bases, according to the South China Morning Post. Many have already come to Quebec where hydro power is cheap, plentiful and non-polluting, but others have set up shop at dirty coal plants in Australia and elsewhere.
In 2017, China banned cryptocurrency exchanges that serve local people, causing a plunge in prices. The new rules also pose a risk to manufacturers of mining equipment that dominate the Bitcoin industry. The NDRC published the paper for public comment, and the consultation period ends on May 7th.
