- China, through its National Development and Reform Commission (NDRC), is now seeking its citizens’ opinions on cryptocurrency mining illegalization.
- The nation’s series of bans on everything crypto-related has now pushed the digital asset industry to other regions.
In a shoot first, ask questions later move, the National Development and Reform Commission (NDRC) of China is now seeking public opinions on the nationwide cryptocurrency mining ban. The commission’s notice says it will seek “public consultation” from Chinese citizens between Oct. 21 and Nov. 21. A translated version of the notice reads;
In accordance with the deployment of work related to the “mining” activities of the virtual currency, the National Development and Reform Commission, together with the relevant departments, has revised the directory of guidance for industrial structure adjustment (2019) and is now open to the public for comments,
China’s NDRC on crypto mining ban
For years now, the Chinese government has imposed on its citizens a series of crypto-related bans. This year, authorities illegalized crypto mining operations, whether they utilized renewable energy or not. Financial institutions and payment companies were also forbidden from providing crypto-based services. September 24th was the day the country tightened the noose further and banned all crypto transacting and mining activities in the country.
Faced with hostile conditions, miners migrated en masse to neighboring Kazakhstan and towards the West, to North America. The region now leads in Bitcoin mining hashrate after Europe. Mining companies such as Bitmain stopped selling mining rigs in China. Even more, crypto exchange Binance, and OKEx among others banned Chinese users and IPs from accessing crypto services.
Thereafter, China moved on full steam to its digital yuan, a central bank-issued digital currency (CBDC). Despite its government censorship, tech giants largely embraced payment technologies using the digital yuan. Focus also went to its Blockchain-based Service Network (BSN). Other than being the backbone of cryptocurrencies, blockchain also underpins other fields such as trade, data sharing, and identity management, which the communist-run government is keen on pursuing.
On the flipside
Nonetheless, the recent decision shows a sort of reform that might lead to the country lifting at least its crypto mining ban, if not the all-consuming crypto ban. Governments of nations such as India have in the past gone back on their resolve to outlaw digital assets. India’s central bank, the Reserve Bank of India, imposed a ban on all virtual asset transactions in 2018. Two years later, the country’s Supreme Court lifted the ban. The nation’s finance minister Nirmala Sitharaman even asserted that the nation would not shut out a “futuristic thing” such as crypto.
That said, there is still uncertainty regarding the regulations that might follow should the Chinese government undo the ban. Such include tax responsibilities for crypto holders or crypto-related firms. In the US, for instance, Bitcoin and other digital assets are treated as property for tax purposes. India also charges crypto exchanges 18 percent Goods and Services Tax on income resulting from trading.