China cracking down on cryptocurrency 'mining'

China will crack down on the "mining" activities of cryptocurrencies to enhance the control and regulation of mining energy consumption.

The National Development and Reform Commission, together with other authorities, on Friday issued a notice on regulating the "mining" activities of virtual currencies, strictly banning new virtual currency mining projects from being included in the Dual Control System of Total Energy Consumption and Energy Intensity assessment.

"Mining" activities of virtual currencies refer to the production of virtual currencies calculated by a dedicated "mining machine," for which energy consumption and carbon emissions are huge, while the contribution to the national economy is low and the impetus to industrial development and scientific and technological progress is limited, according to the commission.

In addition, the risks arising from the production and trading of virtual currencies are gradually emerging. The excessive and disorderly development is having a negative impact on economic and social development, and the progress of energy saving and carbon emission reductions, the commission said.

Authorities will promote the data analysis of grid-connected power generation data and abnormal use of electricity. By technical means it is to monitor and control energy consumption, and strengthen the on-site inspection of users with large electricity consumption.

They are fully mapping out local virtual currency mining projects that have been put into operation, setting up a project list and combing through the basic data, including the enterprises they're connected to, the scale, hash rate and electricity consumption of the virtual currency mining projects in operation.