China Takes Another Swing at Cryptocurrency Mining, Labeling It ‘Extremely Harmful’

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The country’s National Development and Reform Commission (NDRC) has said that it will increase electricity tariffs for organizations discovered to be using subsidised power to participate in digital currency mining. 

Meng Wei, NDRC spokeswoman, lashed out at cryptocurrency mining on Tuesday, claiming that it consumes a lot of electricity and causes carbon emissions. Wei continued by stating that the development and trade of cryptocurrency entails significant dangers. 

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The current effort to target mining will be “critical” to China’s objective of reducing carbon emissions and achieving carbon neutrality, Wei said at a press conference in Beijing on Tuesday, as CNN reported. 

Notably, China aspires to achieve carbon neutrality by 2060, and crypto mining consumes a significant amount of energy. Additionally, the country is experiencing a power crisis, which has impacted various enterprises and residences.

 China’s crackdown on cryptocurrencies and crypto mining has stepped up. The authorities described crypto mining as a ‘very damaging’ practise since it jeopardises the country’s attempts to reduce carbon emissions. 

Furthermore, the Chinese government and People’s Bank of China declared in September that cryptocurrency-related enterprise is banned in the country. Additionally, the agencies pledged to track down and disrupt unlawful operations involving virtual currencies. Bitcoin Collapses Following China’s Central Bank’s Prohibition on Bitcoin and Other Virtual Currencies.

China is interested in cryptocurrency for a variety of reasons

Currency transactions are viewed by authorities as a serious financial risk and a means for individuals to avoid strong national capital controls, and they are attempting to put a halt to such operations.

 The restrictions on decentralised currencies like bitcoin come as China’s central bank intends to create a digital version of the yuan, giving the central bank greater control over money flow and exchange.

Beijing is also working hard to fulfil its 2060 carbon-neutrality target, which crypto mining may jeopardise. 

The technique is energy-intensive and consumes a substantial amount of computer resources because it requires machines to solve a sophisticated sequence of algorithms in order to verify transactions. China is also suffering from a major power crisis, which has resulted in power rationing in millions of homes and businesses.

During a press conference on Tuesday, Meng stated that the current move to target mining will be “extremely advantageous” to China’s carbon reduction and carbon neutrality ambitions. According to Meng, China must “strictly forbid [cryptocurrency mining] from reviving from the dead ashes.”

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