China’s National Development and Reform Commission (NDRC) proposed banning cryptocurrency mining within Chinese borders in April. While this proposal has not yet resulted in any action from the Chinese government, CoinDesk has reported on a leaked document from China’s Inner Mongolia region which outlines plans to investigate and eventually shut down Bitcoin mining operations in the region. A government official told CoinDesk that the move is part of a wider nationwide phaseout plan.
Such developments tend to cause concern in Western media. In their May 2019 research report analysing the mining industry, CoinShares provided valuable commentary on the China mining situation highlighting the unlikely situation of mining being banned across the country.
“Chinese miners already operate in a legal grey area, with large differences in treatment between local jurisdictions, and concrete, large-scale coordinated action on the ground would likely be required to effectively uproot miners… there appears to exist significant differences between local and national treatments of the mining industry, with certain local governments seemingly much more inclined to view the industry positively due to its vigorous revenue generation on municipal levels.”
CoinShares May 2019 Mining Report
CoinShares went on to note that “some miners [were] rumoured to be ‘unwelcome’ in Inner Mongolia and Xinjiang” adding further strength to the argument that the crypto mining concerns in Inner Mongolia do not extend to China.
Sources: CoinDesk, CoinShares
