China’s top economic planning agency has offered more details about how it will fulfill its promise to root out cryptocurrency mining, saying that in the next phase the crackdown will focus on industrial-scale mines and state-owned entities’ involvement.
Authorities will also prioritize the elimination of Bitcoin mining in particular, Meng Wei, a spokesperson for the National Development and Reform Commission (NDRC), told a Tuesday press conference.
In addition, the NDRC will also force crypto mining projects that currently pay residential electricity prices to pay higher rates as a punishment, Meng said, after being asked about what the NDRC’s next steps will be in its crackdown on the industry.
“Virtual currency mining features high energy consumption and carbon emissions, and doesn’t play a positive role in industrial development and technological progress,” Meng said. “The risks derived from the production and trading of virtual currency are becoming more and more prominent. Its blind and disorderly development has a severe adverse impact on promoting high-quality economic and social development, energy conservation and emission reduction.”
Cryptocurrency mining gobbles up vast amounts of power, both through the electricity consumed by the specialized computer equipment needed to solve the mathematical puzzles that produce the currency and through the energy needed to cool the machines and prevent them from overheating.
As China works to implement its pledge to create a low-carbon economy and reach peak carbon emissions by 2030, it has stepped up efforts to clamp down on crypto mining and trading since May this year.
In September, the NDRC and 10 other government agencies jointly released a notice that said they will gradually wipe out existing crypto mining projects and prohibit construction of new projects.
Authorities in China’s major cryptocurrency mining hubs have sprung into action. The Inner Mongolia and Xinjiang Uyghur autonomous regions, and Qinghai, Yunnan and Sichuan provinces all announced rectification campaigns that include a ban on new mining projects, along with orders for existing mines to close and for power plants to cut off supplies to suspected mining projects.
The broader crackdown is also concerned with the financial risks that cryptocurrencies could engender. Regulators have said that cryptocurrency trading is speculative and risky, and facilitates money laundering, fraud, illegal cross-border fund transfers and tax evasion.
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