The NDRC recently said that cryptocurrencies are not assets, like fiat money, as no monetary authorities issue them. The Chinese authorities banned them immediately after they released the digital version of the yuan (e-CNY).
The National Development and Reform Commission of China (NDRC) recently said no monetary authorities issue cryptocurrencies. In that sense, the leading economic planning institution considers they are not assets like fiat money or precious metals. Following those comments, the price of Bitcoin (BTC) (7%), Ethereum (ETH), and Binance (BNB) dropped.
According to the NDRC, cryptocurrency miners consume a too high level of energy. They added that this business does not contribute to the industrial and technological development of the country at all.
The PBOC Associates Cryptocurrencies with Illicit Activities
In October, the People’s Bank of China (PBOC) and other banking and regulatory institutions highlighted that cryptocurrency transactions imply different illegal and criminal activities. That led Chinese miners to massively migrate to other regions of Asia like Kazakhstan and Russia.
The NDRC made that warning some days after announcing the expulsion of Xiao Yi from the Chinese Communist Party. The former vice-chairman of Jiangxi provincial Political Conference misused his political power to support companies related to cryptocurrency mining.
Local Chinese media reported Xiao Yi’s political trial by the Central Commission for Inspection and Discipline of China. That agency determined that the former political official violated the industrial policies of the nation.
The Chinese Government Persecutes Cryptocurrencies
That is not the first time that the NDRC has stated that China has vowed to take radical measures against cryptocurrency mining this year. The country intensified its efforts to repress and persecute crypto assets since September by banning their trade. They also said that they would investigate all mining operations taking place in the country.
In April, the Nature Communications journal published a study indicating that China accounted for more than 75% of Bitcoin mining worldwide earlier this year. However, the continued bans and regulations throughout the year led to a massive migration of miners to other Asian countries.
The Chinese authorities have singled out cryptocurrencies for some reasons that affect their national interests. They perceive cryptocurrencies as a considerable financial risk and a way for people to evade strict economic controls. The ban on cryptocurrencies occurred immediately after the government released the digital version of the yuan (e-CNY). That would allow the PBOC to exert greater control over the flow and exchange of money of the population.
China is also trying to meet its climate targets to become a carbon-neutral country before 2060. For that reason, they want to take cryptocurrency mining out of the country as it could threaten that national objective. They believe that that activity consumes too much energy, which causes severe power shortages. That situation has led them to implement power rationing in millions of homes and factories in the country.
Decentralized cryptocurrencies like Bitcoin and Ether allow people to trade without the control of monetary authorities. As the PBOC considers those assets contribute to illegal or criminal activities, they have banned miners from working in the territory. Those countries where they have arrived are now the ones benefiting from that activity.
By Alexander Salazar
