Cryptocurrencies tumble as China continues its crackdown against mining

Cryptocurrencies tumble as China continues its crackdown against mining
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  • As part of its crackdown against cryptocurrency, China has come down heavily against mining.
  • It has also warned state-owned companies from engaging in mining.
  • The latest crackdown has sent cryptocurrency prices spiralling, with Bitcoin and Ethereum both down by nearly 10%.

The Chinese government is ramping up its crackdown on cryptocurrency. Authorities have called crypto mining an “extremely harmful” practice that threatens to jeopardize its carbon emission goals.

The country’s state-owned enterprises have been asked to stop cryptocurrency mining and they have also been warned that punitive measures in the form of higher electricity prices would be imposed on companies that defy the ban.

China’s National Development and Reform Commission (NDRC) spokesperson Meng Wei said that the commission plans to crack down on industrial-scale bitcoin mining as well as the involvement of state firms.

Meng said that mining "consumes lots of energy" and "produces lots of carbon emissions."

NDRC, which is the country’s top economic planning agency, held a special meeting to discuss the issue last week. As part of the crackdown against cryptocurrency, the focus is being given to commercial mining and state-owned businesses.

The NDRC has said that it would raise electricity prices for companies found using access to subsidized power to engage in cryptocurrency mining. The agency had earlier revealed that it plans to add bitcoin mining to a draft list of industries to be eliminated from the country’s economy.

Soon after these remarks, Bitcoin tumbled by almost 9%, reaching $59,830, its lowest price in over a week. Ethereum, the second-biggest crypto, fell by over 10%, touching $4,250, a new low in almost a month.

Not the first time China has dragged down crypto market

Earlier this year, a statement by China’s central bank had sent cryptocurrencies spiralling. The People’s Bank of China (PBOC) had reiterated that it considers all crypto-related activity to be illegal during a Q&A session on its website. It highlighted that crypto trading, order matching, token issuance and derivatives for virtual currencies are not in compliance with the country’s laws.

Meng said that the ongoing effort to curb mining will be "of great significance" to the country’s goal of reducing carbon emissions and that China must "strictly prevent (mining) from rising from the dead ashes.”


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