China's National Development and Reform Commission (NDRC) has escalated its crackdown on cryptocurrency-related activities by targeting state-owned industrial enterprises engaged in digital currency mining. The commission stated that it will focus on the "comprehensive rectification" of such operations, citing concerns over energy waste and illegal financial activities associated with cryptocurrencies. The announcement reaffirms China's stance that virtual currencies do not hold the same legal status as fiat money, as quoted by CGTN, the international arm of state broadcaster CCTV.
Punitive Electricity Rates and Industrial Optimization
NDRC spokesperson Meng Wei revealed at a press conference that the commission is studying the possibility of imposing "punitive" electricity tariffs on state-owned firms that mine crypto using subsidized power. The move is intended to discourage energy-intensive mining and promote conservation. The NDRC believes that eliminating crypto mining at state-run facilities will facilitate industrial restructuring, boost energy efficiency, and help China achieve its carbon neutrality goals on schedule. In early October, the NDRC and the Ministry of Commerce proposed adding cryptocurrency mining to the country's "Negative List for Market Access," effectively banning investment in the sector.
Historical Context of China's Crypto Ban
China banned cryptocurrency trading in 2017 but initially refrained from interfering with mining operations. The situation changed in May 2021 when the State Council, following President Xi Jinping's pledge for carbon neutrality by 2060, launched a sweeping clampdown on mining. In September, the People's Bank of China reiterated its hardline stance. The latest NDRC announcement marks a further tightening of regulatory screws, specifically targeting state-owned enterprises that may have been engaging in large-scale mining under the radar.
Market Impact and Global Responses
The news, combined with the signing of the U.S. Infrastructure Investment and Jobs Act (which includes crypto tax reporting provisions), triggered a broad sell-off in cryptocurrency markets, wiping out billions in capitalization. Major cryptocurrencies fell sharply on Tuesday, with Bitcoin briefly dipping below $60,000 before recovering to around $60,500 at the time of writing. Market participants expect China to continue its aggressive stance, forcing mining operations to relocate to friendlier jurisdictions such as North America and Central Asia. The crackdown underscores the growing regulatory scrutiny on crypto mining globally, as governments weigh economic benefits against environmental and financial stability risks.