China has intensified its crackdown on crypto mining, calling it “extremely harmful” and a risk to carbon reduction efforts. During a news briefing in Beijing on Tuesday, Meng Wei, a spokesperson for the National Development and Reform Commission, slammed Bitcoin mining. She claimed that the action “consumes a lot of energy” and “emits a lot of carbon dioxide.”
China has intensified its crackdown on crypto mining
Meng stated that the National Development and Reform Commission (NDRC), the country’s top economic planner, will undertake a “full-scale” crackdown on cryptocurrency mining, focusing on commercial mining and the involvement of state-owned enterprises in the industry. She also called the business “blind and disorganized,” claiming that crypto production and trade pose “significant hazards.”
The NDRC announced that any institution found to be misusing its access to subsidized power to participate in crypto mining would face higher electricity prices as part of its new campaign. Historically, the government has offered discounted electricity tariffs to schools, community centers, and other public welfare institutions.
Following the comments, Bitcoin’s price plummeted by more than 7 percent to $60,889, its lowest level in more than a week. The reason for the drop was not immediately evident, but it happened at the same time as the NDRC press conference. On Tuesday, Ether, the second-largest digital currency behind Bitcoin, fell more than 8 percent to $4,297, its lowest level in two weeks. This isn’t the first time Beijing has promised to crack down on cryptocurrency mining this year.
Since May, when it outlawed cryptocurrency trading and stated it would monitor mining activities in the nation, China has stepped up its attempts to crack down on cryptocurrency.
According to a study published in April in the peer-reviewed journal Nature Communications, China accounts for more than 75 percent of global Bitcoin mining. Bitcoin is still enjoying a great year, despite its recent drop. In 2021, the cryptocurrency has increased by around 110 percent. It reached a new high of $69,000 last week.
China is targeting cryptocurrency for a variety of reasons. Authorities see currencies as a major financial danger and a tool for people to avoid rigorous national capital controls, and they want to put a stop to it. The limits on decentralized currencies like Bitcoin come as China’s central bank prepares to launch a digital version of the yuan, which would give the central bank more control over money flow and exchange.
Beijing is also attempting to reach its climate goals of becoming carbon neutral by 2060, which crypto mining may jeopardize. Because it involves machines to solve sophisticated series of algorithms to validate transactions, the process is energy-intensive and uses a lot of computer resources. China is also dealing with a major power crisis, which has resulted in power rationing in millions of homes and factories.
Meng stated at a press conference on Tuesday that the current move to target mining will be “of tremendous relevance” to China’s ambitions to cut carbon emissions and achieve carbon neutrality. China must “strictly prevent [cryptocurrency mining] rising from the dead ashes,” Meng said.
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