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Tuesday, November 30, 2021

China to take punitive measures against cryptocurrency mining, citing environmental concerns

Chinese authorities say cryptocurrencies disrupt economic order, and facilitate illegal asset transfers and money laundering.

By: Tech Desk | Pune |
November 17, 2021 5:34:57 pm
bitcoin, bitcoin value, bitcoin price, china bitcoin news, china bitcoin crackdownA representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken June 14, 2021. (REUTERS)

Chinese authorities are taking punitive measures to stop cryptocurrency mining, calling it an “extremely harmful” practice that is jeopardizing country’s efforts to reduce carbon emissions. This development comes as China’s central bank made all cryptocurrency-related transactions illegal this included—crypto trading and mining.

According to a report by Bloomberg, China told its government companies to stop cryptocurrency mining and said it would raise electricity prices for any institution found to be abusing its access to subsidized power to participate in crypto mining.

“The National Development and Reform Commission (NDRC) plans to crack down on industrial-scale Bitcoin mining as well as any involvement by state companies,” Meng Wei, a spokeswoman, said at a press conference. She added that crypto mining and trade comes with “prominent risks,” and attacked the crypto industry, calling it “blind and disorderly.”

Chinese authorities say cryptocurrencies disrupt economic order, and facilitate illegal asset transfers and money laundering. The authorities blame cryptocurrency miners for energy waste to deadly coal mining accidents, and a potential threat to the country’s efforts to reduce carbon emission. The country aims to become carbon neutral by 2060.

It should be noted that Bitcoin or any cryptocurrency mining requires high-powered computers, that are competing to solve complex mathematical puzzles, in a process that makes intensive use of electricity. Interestingly, prices of mining rigs also tumbled after China imposed a ban—one crypto mining machine which sold around 4,000 yuan ($620) in April and May, could now be bought for as low as 700-800 yuan, as per a Reuter’s report.

Interestingly, China accounts for more than 75 percent of Bitcoin mining, according to research published by the peer-reviewed journal Nature Communications in April. The country went from controlling up to 75 percent of all Bitcoin mining in the world in April to not contributing to the industry at all as of July 2021, according to data compiled by the University of Cambridge’s Centre for Alternative Finance.

Meanwhile, the prices of Bitcoin tumbled today, sliding almost 5 percent to $60,971.56 and Ether fell as much as 6 percent, according to coin gecko.

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