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China Set to Blacklist Crypto Mining as Country’s Biggest Bank Cuts Off Forex Business Accounts

China’s state planner has indicated yet another push by the government to cut Chinese users from engaging in any form of crypto-related activity according to a document made public on Friday October 8. 

The National Development and Reform Commission (NDRC) shows in the document that China has added cryptocurrency mining to a draft list of industries in which investment is either restricted or prohibited. 

China in May warned against Bitcoin mining in the country following a State Council meeting. The sector changed afterwards as a mass exodus of Chinese miners was recorded and China’s share of hash power dropped. 

The situation worsened by September when the People’s Bank of China placed a total ban on crypto trading – and later extended to mining operations across regions – as the country declared all cryptocurrency-related business transactions as illegal financial activities. Some market insiders suggest it is China’s most severe crackdown on the cryptocurrency industry yet.

Being included in the “negative list” according to the NDRC, means that investing in crypto mining is now one of the sectors and industries – 117 in all down from 123 in 2020 – that is off-limits to both Chinese and foreigners.

The state planner also noted that investment of “non-public” capital into a variety of publishing activities including live broadcasts, news-gathering, editing and broadcasting entities and the operation of news is also being halted. This aspect of the prohibition could go many ways including affecting information flow within the country’s crypto space. 

It could be recalled that the NDRC sought public opinion on a revised list of industries it wanted to encourage, restrict or eliminate in April 2019 and Bitcoin mining was on the list at the time. However, it was not mentioned when the final version was published by November of the same year. No particular reason was given for the move aside from the general knowledge that China was regarded as the world’s largest market for computer hardware designed to mine cryptos like Bitcoin. 

Crypto mining now appearing on the list can be easily connected to the State Council’s issued statement in May that kickstarted a new crackdown on crypto trading and mining in China. The galvanized support it has received across several government agencies including banking, securities and foreign exchange regulators some of which recently came together to establish a departmental coordination against “the further prevention and disposal of virtual currency transactions” is also noteworthy. 

Several crypto exchanges, especially those with roots in China, have altered their operations with some choosing to shut out Chinese users from their platforms as a result of the new regulatory policy in place. Other crypto-related businesses in China such as mining companies and pools have shut down completely or relocated.

Also on Friday, China’s biggest bank, the Industrial and Commercial Bank of China (ICBC) reportedly said it will restrict certain types of retail businesses involving foreign exchange and commodities trading.

The ICBC says it will suspend new account openings as from Oct 17 for so-called “account forex business” which enables individuals to only trade forex against the yuan for speculative or hedging purposes but cannot withdraw or transfer the foreign currencies from the trading accounts.

From Nov 14, the bank says existing clients will be barred from opening new trading positions.

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