China’s NDRC Further Enforces Crypto Mining Ban, Seeks Punitive Damages for Miners
The National Development and Reform Commission (NDRC) China has called for further enforcement of the ban on crypto mining in the region via disciplinary electricity prices on large crypto mining farms.
Crypto Miners to Pay Exorbitant Electricity Bills
China’s NDRC demanded the implementation of the next phase of its crypto mining crackdown by considering the enforcement of huge electricity fines for large miners still operating in residential areas.
Meng Wei, the spokesperson for China's NDRC, stated in a press conference on Tuesday that the council was moving into the next phase of enforcing its ban on virtual currency mining activities in the country.
He disclosed that provinces and municipalities would establish a system to monitor, clean up and mining-related activities in their areas of jurisdiction and punish those involved in these activities.
In September, China issued an official ban on all virtual currency mining activities in its territory, citing carbon rates and emissions concerns. The ban was also aimed at reducing the rates of money laundering and fraud blamed on the decentralized nature of virtual currencies.
In 2020, China was responsible for roughly 50% of the total bitcoin supply globally, consuming about 86 terawatt-hours (TWh) of electricity. About 63% of the power source came from coal-fired plants.
In July 2021, Rystad Energy revealed that if China could completely take out Bitcoin mining from its energy consumption portfolio, the country would cut down on 57 million tonnes of its carbon (CO2) emissions.
Measures to Curtail Virtual Currency Mining
According to the notice issued by relevant authorities in China, the next step in terminating mining activities will require a concentrated focus on industrial state-owned mining units. As a consequence, units operating in residential areas will study the disciplinary electricity prices that will be imposed on them, which will create a high-pressure situation that will discourage other virtual currency miners from mining.
Despite virtual currencies being a solution and opportunity to an array of problems plaguing the finance sector, the cost of production outweighs the possible benefits they present because of the high carbon footprint it exerts on the earth.
Calls have been made recently by environmental activists to cut down on the carbon emissions of the crypto ecosystem. So far, more mining farms are already exploring new power alternatives, with renewable energy sources being a likely berth for many.
Carbon credit initiatives are also picking up, with blockchain-based companies now working on their carbon neutrality program.
With such measures in place and already underway, such as the Bitcoin Taproot upgrade, which is designed to improve the efficiency of transactions on the premier blockchain by applying smart contracts, the subject of energy consumption will become a thing of the past.