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China to tighten virtual currency mining regulation

By Ouyang Shijia | | Updated: 2021-11-16 14:35
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China's top economic regulator announces it will intensify regulation over virtual currency mining on Nov 16, 2021. [Photo/IC]

China's top economic regulator announced on Tuesday it will intensify regulation over virtual currency mining, as part of the country's ongoing efforts to save energy and cut carbon emissions.

Meng Wei, a spokeswoman for the National Development and Reform Commission, said the commission will strengthen regulation over virtual currency mining, with a key focus on industrial and centralized mining, State-owned entities that mine virtual currency and bitcoin mining.

Meng told a news conference in Beijing that it will consider imposing punitive electricity prices on those enjoying household electricity prices that involve virtual currency mining activities.

"Virtual currency is a specific virtual commodity that is not issued by the monetary authority, and it is not legally compensatory and compulsory. It is not a real currency and should not and cannot be used as currency in the market," Meng said.

Citing a notice made public in September by the People's Bank of China and nine other government departments, Meng said virtual currency does not have the same legal status as legal tender, and that business activities related to virtual currency are illegal.

According to her, virtual currency mining consumes a lot of energy and carbon emissions, which does not play a positive role in promoting industrial development and technological improvements.

"The risks derived from the production and trading of virtual currency are becoming prominent, and its blind and disorderly development has adverse effects on high-quality economic and social development, energy conservation and emissions reduction," Meng added. "The regulation of mining activities is of great significance to promoting the optimization of the industrial structure, energy conservation and emissions reduction and achieving the carbon peak and carbon neutrality targets."

The announcement came after the NDRC held a video conference on the regulation of virtual currency mining activities earlier this month.

During the conference, the NDRC urged local governments to take measures to further crack down on virtual currency mining, especially State-owned entities that take part in the mining.

Earlier in October, the NDRC unveiled the latest draft version of the nationwide negative list for market access, saying it has added cryptocurrency mining to the latest draft list of industries in which investment is restricted or prohibited.

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