…As UNICEF condemns Yemeni school blast killing 14 children***
China’s state planner wants to ban bitcoin mining in the
country, according to a draft list of industrial activities the agency is
seeking to stop in a sign of growing government pressure on the cryptocurrency
sector.
China is the world’s largest market for computer hardware
designed to mine bitcoin and other cryptocurrencies, even though such
activities previously fell under a regulatory grey area.
The National Development and Reform Commission (NDRC) said
on Monday it was seeking public opinions on a revised list of industries it
wants to encourage, restrict or eliminate.
The list was first published in 2011.
The draft for a revised list added cryptocurrency mining,
including that of bitcoin, to more than 450 activities the NDRC said should be
phased out as they did not adhere to relevant laws and regulations.
It is also unsafe, wasted resources or pollutes the
environment.
It did not stipulate a target date or plan for how to
eliminate bitcoin mining, meaning that such activities should be phased out
immediately, the document said.
The public has until May 7 to comment on the draft.
State-owned newspaper, Securities Times, said on Tuesday the
draft list “distinctly reflects the attitude of the country’s industrial
policy’’ toward the cryptocurrency industry.
“The NDRC’s move is in line overall with China’s desire to
control different layers of the rapidly growing crypto industry and does not
yet signal a major shift in policy,’’ said Jehan Chu, Managing Partner at
Blockchain Investment Firm Kenetic.
“I believe China simply wants to ‘reboot’ the crypto
industry into one that they have oversight on, the same approach they took with
the Internet.’’
Other bitcoin traders said they were not surprised by the
government’s move.
“Bitcoin mining wastes a lot of electricity,’’ said one
Chinese bitcoin trader, who declined to be named due to the sensitivity of the
situation.
Last week, the price of bitcoin soared nearly 20 per cent in
its best day since the height of the 2017 bubble and breaking $5,000 for the
first time since mid-November, though analysts and traders admitted they were
puzzled by the surge.
Bitcoin, which accounts for around half of the
cryptocurrency market, was down by around 1.4 per cent on Tuesday, while other
major coins such as Ethereum and Ripple’s XRP also fell by similar amounts.
Traders in London said it was unclear how much the Chinese
move was weighing on the market.
The cryptocurrency sector has been under heavy scrutiny in
China since 2017 when regulators started to ban initial coin offerings and shut
local cryptocurrency trading exchanges.
China also began to limit cryptocurrency mining, forcing many
firms – among them some of the world’s largest – to find bases elsewhere.
Nearly half of bitcoin mining pools – groups of miners that
team up for economies of scale – are located in the Asia-Pacific, a Cambridge
University study said in December.
“Half of the network is probably located in China,’’ said
Alex de Vries, a consultant with PwC in Amsterdam, who specialises on
blockchain and researches cryptocurrency mining.
He added that the number of mining facilities in the world
is still limited to several hundred.
Countries with relatively cheap electricity have emerged as
major hosts of cryptocurrency mining.
Mati Greenspan, an analyst with eToro in Israel, said any
ban by China would cut a key supply of cheap electricity for the industry and
raise the average cost to mine bitcoin.
Chinese companies are also among the biggest manufacturers
of bitcoin mining gear, and in 2018 three filed for initial public offerings in
Hong Kong, looking to raise billions of dollars.
However, the two largest, Bitmain Technologies, the world’s
largest manufacturer of bitcoin mining gear, and Canaan Inc have since let
their applications lapse.
People familiar with the deals said that Hong Kong
regulators had many questions about the companies’ business models and
prospects.
Bitmain declined to comment on the NDRC’s proposal to ban
bitcoin mining.
Canaan did not respond to requests for comment.
According to Canaan’s IPO prospectus filed in 2018, sales of
blockchain hardware primarily for cryptocurrency mining in China were worth 8.7
billion yuan ($1.30 billion) in 2017, 45 per cent of global sales by value.
The prospectus forecasts that sales in China would rise to
35.6 billion yuan by 2020.
In the meantime, the UN children’s fund has condemned a
blast near two schools in Yemen’s rebel-held capital Sana’a that it said
“killed 14 children and critically injured 16” this week.
In a statement on Tuesday, UNICEF Regional Director for the
Middle East and North Africa, Geert Cappelaere, disclosed that the time of
Sunday’s blast was “almost lunchtime and students were in class.”
“The critically injured children, many of whom are fighting
for their lives, are now in hospitals in Sana’a. Most are under the age of
nine. One girl succumbed to her injuries yesterday morning,” Cappelaere said.
“It is hard to imagine the sheer horror that those children
experienced – and the sheer horror and guilt parents may feel for having done
what every parent aspires to: sending their children to school,” he added.
“Killing and maiming children are grave violations of children’s
rights,” the statement said.
It warned the blast “may further discourage parents to send
their children to school.”
On Sunday, the Iran-backed Houthi rebels said at least 11
civilians, mostly students, were killed by Saudi-led coalition bombing of
houses and a school in a residential area in Sana’a.
Yemen has been embroiled in a devastating conflict between
the Saudi-backed government and the Houthis since late 2014.
The feud has intensified since March 2015, when the Houthis
advanced on the government’s temporary capital of Aden, prompting Saudi Arabia
and its Sunni allies to start an air campaign against the Shiite group.
