China’s National Development and Reform Commission (NDRC) no longer thinks that the Bitcoin (BTC) mining industry should be phased out from the country, the economic planning agency published on 6 November.
According to the newly published Catalog for Guiding Industry Restructuring, which will take effect from 1 January 2020, virtual currency mining was removed from the category of industries that Beijing considers undesirable. Many reacted positively to the news on Twitter, especially Blockstream’s CSO Samson Mow who tweeted:
The NDRC, which was established in 1998 as one of the cabinet-level departments that form the State Council of the Chinese central government, first published an industry reform catalog in 2005 by grouping industry sectors into three categories, those that need to be encouraged, restrict, or outright eliminated.
In April the NDRC published a draft of the catalog, which had “virtual currency mining, such as the production process of bitcoin” under the category to be phased out of the country. The agency has also claimed that since the initial publication of the draft, it has received over 2,500 suggestions which were taken into account before the finalized version of the catalog was published.
With China’s cheap electricity, the mining industry has long been profitable in the country. A recent report explained that in the Sichuan province in Southwest China electricity costs could be anywhere from 0.08 yuan ($0.01) in the period of high water, to 0.28 yuan ($0.04) in the dry season.
In recent months China has also been bullish when it comes to blockchain technology. The country has already launched a new regulatory system for fintech products, and passed a new cryptography law. The country’s president, Xi Jingping, has even said that China needs to accelerate its blockchain adoption, as the technology is a key to promoting technological innovation.