China’s top economic planning agency, the National Development and Reform Commission (NDRC) has proposed a ban of country’s crypto mining industry. The draft list includes a ban on crypto mining along with 450 other industries which the state deems to be in violation of laws and regulations, pose a safety hazard or are unecological.
So, what happens now? The proposed list is in the public domain for feedback until May 7th, after which the decision would be taken. But, such public consultation has a very limited say on the drafting of China’s economic policy.
The list forms a part of NDRC’s wider catalogue for guiding industry restructuring, which has been issued since 2005 and decides which industry should be given support or which has to be restricted or eliminated. But, most industries which get featured in the list and marked for elimination, are not always eliminated and most of them reappear in the draft list year after year.
So, now if China decides to ban the crypto mining industry, then it will have some positive recuperation. Firstly, the industry which is usually dominated by China due to the availability of cheap electricity will get more decentralized. It will surely push the mining cost higher, but will also have a positive effect on Bitcoin prices.
eToro senior market analyst, Mati Greenspan said, “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.”
If the ban is implemented, the mining firms like Bitmain will be on the negative side of the territory, which depends on Chinese mining rigs and cheap electricity to boost up its earnings.
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