China is considering a ban on Bitcoin mining and is soliciting public comments on the subject through May 7.

It appears that the estrangement between China and cryptocurrency is finally reaching the divorce stage. Reuters is reporting that the Chinese government is now considering a proposal to outright ban Bitcoin mining, which is a move that is not terribly unexpected.

No Love for Bitcoin Mining

The National Development and Reform Commission (NDRC) of China issued a list of industries that it is considering to either support, restrict, or ban. The latest version of the list contains cryptocurrency mining, along with 450 other activities that the NDRC says should be phased out due to polluting the environment, being unsafe, wasting resources, or not following pertinent laws and regulations.

People have until May 7 to comment on the document, but chances are that Bitcoin mining could be phased out completely immediately after the deadline. The Securities Times (a state-owned newspaper) said the list “distinctly reflects the attitude of the country’s industrial policy” towards Bitcoin mining.

Of this development, Jehan Chu of blockchain investment firm Kenetic, says:

The NDRC’s move is in line overall with China’s desire to control different layers of the rapidly growing crypto industry, and does not yet signal a major shift in policy. I believe China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the Internet.

Not Surprising at All

To be honest, this move should have been expected. The Chinese government has been hostile towards Bitcoin and its virtual currency brethren for quite some time. ICOs were banned in 2017, followed by bans on exchanges and then a firewall was put into place to keep cryptocurrencies out.

The effect of these government actions has been dramatic. The Chinese yuan once accounted for a full 90 percent of Bitcoin transactions but that percentage has now dropped to one percent.

If this ban does end up happening its more likely to push BTC prices up than down. The loss of cheap Chinese electricity would raise the mining cost, which is net positive on price. It would also serve to kill the FUD that Bitcoin mining is centralized.https://t.co/OhVh8fUaXv — Mati Greenspan (@MatiGreenspan) April 9, 2019

The decentralized nature of cryptocurrency is anathema to the communist ideology of the Chinese government. China wants to maintain full control over every facet of its citizens’ lives, which can be seen through the use of tying in benefits to a social media rating. Those who do not toe the party line are denied access to food, medicine, transportation, and even forced to have humiliating ring tones to allow nearby people that an “unclean” person is among them.

The vast majority of Bitcoin mining took place in China due to incredibly cheap power costs (and virtually non-existent environmental protection regulations). Cryptocurrency mining has been squeezed by the central authorities for over a year, and many mining firms have left for greener pastures elsewhere.

It’s highly likely that Bitcoin mining in China will be banned in the coming months. However, such a move is not necessarily a bad thing. Mati Greenspan points out that the costs of mining would rise, which would then push the price of BTC up as well. In the end, Bitcoin will continue to survive and thrive, providing economic opportunity and freedom for those wishing to reach out and grab it.

Images courtesy of Twitter/@MatiGreenspan and Pixabay.