Earlier this year, the National Development and Reform Commission (NDRC), China had stated that it was going to put the Crypto Mining Industry on a list of industries that the government will prohibit in 2020. This ban on crypto mining would have been detrimental to the global bitcoin mining industry. However, in a recent statement, China revealed that it has abandoned its plan to limit bitcoin mining. This will certainly raise the spirits of the global crypto economy and help in the spread and development of crypto resources.
What Is Cryptocurrency And Crypto Mining?
Cryptocurrency is essentially a form of digital currency that is formed, secured, and transacted through the medium of cryptography or code-making. Crypto Mining, is the process in which analysts decipher, verify, and add the transactions in cryptocurrency to the blockchain records. Its other name is digital currency mining.
Crypto Mining In China
China is one of the biggest power centers of cryptocurrency and the crypto mining industry. The crypto mining industry has been in a position of uncertainty since the NDRC had revealed its plans and were contemplating on the rules and policies they would formulate to uphold this ban. The NDRC had published a draft of the Industry Restructuring Catalog in April. This catalog suggested the inclusion of bitcoin mining in a list of industries that will be prohibited from operating in China from 2020.
The draft had garnered widespread negativity and criticism, especially from the industry’s primary stakeholders. The country is home to mining hardware manufacturing giants like Bitmain, Canaan, and Ebang. Some of the biggest mining operations also happen in China regularly. The industry leaders thus claimed that this move by China to ban the crypto mining industry would be detrimental for the global crypto economy.
However, as of now, the country seems to have reconsidered its decision and published an updated version of the list. This will make the crypto market let out its breath, which they had been holding since the publication of the list.
Crypto Hash Power Remains In China
On Wednesday, officials from NDRC stated that they had considered the suggestions they received on the improvement of the draft catalog. The numerous suggestions that had reportedly poured in were no doubt a result of the unexpected move from the NDRC’s part. However, it is more than likely that the country has succumbed to the crushing pressure and objections from the crypto industry.
Unlike most other countries that follow a process of decentralized bitcoin mining, China has a centralized bitcoin policy. When the NDRC published the draft proposal, some sections thus thought that this could benefit the industry in the long-run. This is because the centralization of crypto assets in China poses a standing problem to the global crypto community. The fact that China owns around half of bitcoin’s hash power also does not help things much. Some experts felt that the exit by China from the crypto circuit could help bring greater decentralization.
As of now, China continues to allow a centralized crypto mining industry to remain in the country.