No Ban On Mining From China. Will the Middle Kingdom Dominate the Cryptocurrency Market?

4 min reading

Although six months ago, the China National Development and Reform Commission (NDRC) proposed putting a ban on Bitcoin mining in their country, there are pieces of news today, informing that this body has completely changed its approach and intentions when it comes to this industry.

 

Good news for Chinese miners

Does all this mean that there will be no ban on mining cryptocurrencies in China? Apparently, yes! NDRC has published a new catalog on industrial restructuring which is to enter into force at the beginning of 2020. What has changed, then? In the penultimate version, which was supposed to replace the one from 2011, mining BTC and other cryptocurrencies was on the list of industries that should be eliminated. This reference has been removed from the final copy, though. 

The first catalog of reforms concerning Chinese industry was published in 2005. It groups industries into three categories: those that are supposed to be developed, limited and completely abandoned.

An initial draft of the updated catalog was released in April, 2019. Cryptocurrency mining was grouped as a type of industry that should be eliminated then. This, in turn, means that the order would be directed towards local governments to prohibit the extraction of virtual coins in China. After public consultation, however, the project's plan was renewed.

During the press conference, the NDRC also revealed that since the initial draft of the catalog was released in April, they have received over 2,500 suggestions on a variety of issues. The organ announced that a great number of those suggestions were taken into account when they were creating the current version of the document. Officials did not, however, issue any comment related to the change in attitude to Bitcoin mining.

 

Great revolution!

Apparently, all this is connected with the country's nod to blockchain. It seems that after the approval issued by the President of China, Xi Jinping, there was a great revolution in China in terms of technology. Perhaps, the country has changed its attitude by 180 degrees to provide a friendly environment for its own digital currency which it is eager to issue.

The advantage for all these events is that China has set its heart on working sharply in this regard, setting a good example to other countries. There is a possibility that it will be a healthy competition which will push everyone towards innovation, but, on the other hand, this amount of money in the hands of governments does not necessarily mean freedom, which should also be taken into consideration.

 

The spinning wheel is working

Coming back to the topic of competition, it is important to know how often in the last weeks we have heard news about countries watching or considering the issue of their own digital currency. For instance, at the end of October, the Bahamas wanted to end cash addiction by issuing their own digital money. Work on the project called Sand Dollar has been underway for some time. Pilot tests are to be carried out as soon as by the end of this year. 

A few days ago, the Association of German Banks declared itself in favor of issuing a digital euro as well and the draft document that has been issued by the European Union contains a suggestion regarding the issuance of such currency.

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