China reinforced its position on cryptocurrencies. While crypto mining has been declared illegal in the country, some of them have chosen to operate it illegally.  China has included crypto-mining in the ‘negative list’ of industries.

The “negative list” details sectors and industries that are off-limits to both Chinese and foreign investors. This crackdown has prompted cryptocurrency exchanges to cut ties with Chinese users.  The negative listing means that investors will not be able to invest in the crypto mining sector.

China’s state planner, the National Development and Reform Commission (NDRC), and the Ministry of Commerce released the negative listing announcement consisting of the 2021 draft for Negative List for Market Access. The negative list features sectors and industries which are off-limits to both local and foreign investors in China.

The State Council explained: “The negative list for market access outlines sectors, fields, and businesses off-limits for investors. Industries, fields, and businesses not on the list are open for investment to all market players.”

The document makes it very clear that investments in the blacklisted sectors will potentially negatively impact national security, public interest, and the environment in China.

When the draft passes, it will prohibit investments in the listed industries. These industries are not on the list, which is open for investments to everyone without further approval.  About 117 industries have been either prohibited or restricted by the negative list. The 2020 list had a total of 123 industries.

The NDRC has solicited public views on the negative draft list. The public is permitted to make their submissions from October 8 to October 14, 2021. Whether their opinions will impact the final list is something we are yet to see.

Despite the government of China officially banning crypto trading in 2019, it continued online through foreign exchanges. However, the current year’s crackdown has been significant.

Due to the relatively low cost for electricity in China, and cheaper computer hardware, considerable mining used to be taking place in the country. Due to the crackdown, Bitcoin energy use fell from 75% to 46%.

Chinese regulatory institutions have issued clear warnings about the lack of any kind of protection for continuing to trade in Bitcoin.

While China’s crypto ban had the price of Bitcoin and other currencies drop significantly, the price has recovered significantly. While several onlookers have been stating that China has been banning crypto over and over again, subsequent bans seem to be harder and severe than previous ones.