China to further rectify virtual currency mining activities
Cryptocurrency mining has gained much regulatory attention for energy waste. /CFP

Cryptocurrency mining has gained much regulatory attention for energy waste. /CFP

China's top economic planner on Tuesday said it will focus on the comprehensive rectification of industrial-scale virtual currency mining, citing illegal financial activity and energy waste.

The National Development and Reform Commission (NDRC) said it will focus on cleaning out state-owned units involved in virtual currency and bitcoin mining, reiterating that all virtual currency-related activities are illegal. Virtual currency does not have the same legal status as legal currency, it said.

According to the commission, the rectification of virtual currency mining will facilitate the optimization of China's industrial structure, push energy conservation and emission reduction, and help the country achieve carbon peak and carbon neutrality on schedule. 

The crypto market has gained much regulatory attention recently, as the highly volatile digital currencies pose growing risks, and the mining process consumes a lot of energy. 

The NDRC said that for units that implement residential electricity prices, if they are found to participate in virtual currency mining activities, they will be subjected to punitive electricity prices.

According to the Bitcoin Energy Consumption Index, executing a single bitcoin transaction requires the same amount of energy as the average U.S. home consumes over three weeks.

In 2020, one bitcoin cost about $6,000. By November this year, the price had hit a record high of $69,000.

In May, China barred financial institutions and payment companies from providing services related to cryptocurrency transactions. 

Read more: What makes China a world cryptocurrency mining hub?

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