TL;DR Breakdown
- China seeks to add crypto mining to the Negative List for Market Access.
- The action will outlaw investments in the cryptocurrency sector.
- This isn’t the first time that China is carrying out a ban on crypto-related activity.
The Chinese government is looking to further tighten the noose on crypto activity. In a Friday announcement, the state planner China’s National Development and Reform Commission (NDRC) said it had included the action in the 2021 draft for Negative List For Market Access. Should the draft pass, it’ll outlaw investments in the area.
The NDRC made the list public together with the Ministry of Commerce. According to China’s State Council, the list details the economic sectors where investors can’t venture. They may, however, invest in areas, not on them.
The 2020 version of the list comprised 123 industries. This year has seen a reduction in that number. The draft indicates that China will bar investments in 117 different industries.
China has previously banned crypto mining
The NDRC is receiving public views on the negative draft list. Members of the public can make their submissions from the 8th to 14th October 2021. It waits to be seen what impact, if any, their participation will have on the final list.
This development is the latest in China’s onslaught on the crypto sector. The country’s regulators banned crypto mining and trading early this year. Then, China’s Central Bank, The People’s Bank of China (PBoC), termed transacting crypto assets an illegal financial activity.
Investors seeking crypto safe havens
PBoC’s decision barred banks and exchanges from offering crypto services in the country. That turn of events has forced investors to seek crypto-friendly destinations for their activities.
Among those that have been welcoming is Hong Kong. For instance, in the wake of Friday’s announcement Powercrypto Holdings said it was moving its crypto mining activities to the country.
The firm is a subsidiary of Powerbridge Technologies and specializes in Bitcoin (BTC) and Ethereum (ETH) mining. It’ll be moving 600 BTC and 2000 ETH mining machines. The heavy-duty machines have hash rates of roughly 60 PH/s and 1,000 GH/s, respectively.
Before the crackdowns, China accounted for over 70 percent of the global crypto mining power. The markets have weathered the effects of these Chinese bans.
BTC’s value, for example, has grown by 30 percent after the recent round of restrictions. By press time, the crypto was exchanging at $54,214.
China pursuing e-yuan
Ironically, China continues the development of a digital Yuan even as it purges the crypto sector. The country is one of the many leading the race to develop Central Bank Digital Currencies (CBDCs).
The PBoC is making steps towards the adoption of the e-yuan. It intends to roll out the e-currency for mass use by February 2022. It’s piloting the currency in 11 regions and cities across the nation.
It has tapped leading tech firms and banks to help in the pilot studies. So far, there’s about $30 Million worth of e-yuan in circulation. However, the public’s response to digital currency has been underwhelming. Many remain indifferent to it, opting instead to use the traditional means of payment.
