China softens stance on Bitcoin mining
Following China’s President Xi’s recent embrace of blockchain technology, there have been several encouraging developments in China’s formal relationship with the technology. On October 27, the Chinese Central Bank began urging privately run financial institutions to accelerate the rate at which they adopt blockchain technology. By October 30, a new propaganda campaign supportive of blockchain technology began popping up on popular social media channels in China. Now comes news that there has been a reversal within China’s National Development and Reform Commission (NDRC), which scrapped earlier signaled plans to eliminate Bitcoin mining within the country.
A draft released earlier this year in April had mining among industries that Beijing wanted local administrations to eliminate. It recommended local governments to phase out Bitcoin mining from the country that’s estimated to account for half of Bitcoin’s global hashing power. The final version of the recommendations, due to take effect from January 1, 2020, has removed Bitcoin or other cryptocurrency mining activities from the list of industries that should be restricted or eliminated from the country. The final version replaces the current one published in 2011.
The revision comes after months of public consultation on the topic. It’s not entirely surprising that China has reversed course, given that it dominates the market in terms of mining hash power. During an earlier NDRC press conference, officials said since the release of the initial draft; the agency has received over 2,500 suggestions on various issues, most of which were taken into consideration, although the officials did not comment on any particular advice related to Bitcoin mining.
Established in 1998, the NDRC is one of the 26 cabinet-level departments, which form the State Council of the Chinese central government. The state economic planning agency published its finalized recommendations for national industry restructuring, which excluded any mention of Bitcoin mining. The NDRC serves as a federal macroeconomic planning agency. Its recommendations are put in place to help local authorities understand how they should distribute funding to different industries.
The news comes just weeks after China’s central government passed a new cryptography law. China has long favored blockchain over Bitcoin, but it’s easing up on mining is having a positive impact on the market. This year’s crypto market recovery made Bitcoin SV mining profitable again. Anyone can participate in Bitcoin mining without having to operate mining equipment thanks to services offered by platforms such as the Mempool.
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