Report: PBoC Quashes Bitcoin Mining Ban Rumor in China

Wolfie Zhao
Jan 4, 2018 at 17:00 UTC
NEWS

The People's Bank of China has put to rest a rumor that it would order a domestic shutdown of bitcoin mining activities, according to a local media outlet.

The report, published on Jan. 4 by the Chinese business publication Caixin, said that China's central bank did not host any meetings to discuss a policy requiring the closure of bitcoin mining operations in the country by a certain deadline. The meeting had supposedly taken place on Jan. 3.

However, Caixin's report, which did not identify its sources, indicates that top regulators in China are planning to withdraw preferential benefits such as tax deductions and cheap electricity supplies available to bitcoin mining companies.

This means the government's current stance on bitcoin mining is to neither encourage nor hamper such activities. This change is the latest move from Chinese regulators in the cryptocurrency industry after previously issuing a ban on initial coin offering and tightening restrictions on crypto exchanges.

According to the report, the rumor first emerged through a photo on the WeChat messaging platform that purportedly showed Guo Hongcai, a notable and active investor in the bitcoin industry in China, claiming there would be a ban. Guo later said that this image was fake through his WeChat account.

Despite his disavowal, a Chinese bitcoin blog, 45-block, published a report that the PBoC was discussing a ban on bitcoin mining. The same report also said the central bank would soon require government bodies at different levels to survey and report on the number and locations of bitcoin mining facilities within their territories in an effort to shut down such activities.

The claim was significant given that China currently accounts for nearly 70 percent of the global hash power in bitcoin, a computing capacity that is crucial to solve the mathematical function to mine the cryptocurrency.

However, upon inquiries, Bixin and ViaBTC, two cryptocurrency mining pools based in China, told CoinDesk over WeChat messages that they had received no information regarding the issue from regulators. Neither pool otherwise commented on the issue.

People's Bank of China image via CoinDesk' archive.

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