After repeatedly “banning Bitcoin,” China has come out with fresh negative news for the cryptocurrency with a proposal to add mining to a “Negative List for Market Access.”
Crypto mining to go on China’s red list
China has long been a staunch opponent of cryptocurrencies, causing repeated short-term price drops in the price of Bitcoin with bearish news. The latest proposal is to add cryptocurrency mining to the 2021 draft “Negative List for Market Access.” This was published by China’s National Development and Reform Commission, the state planner, in a joint release with the Ministry of Commerce. It 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.”
123 industries made the list in 2020 and 117 in the current version. The Development and Reform Commission is currently soliciting public opinions on the list, which will last until October 14. China’s crackdown on crypto miners is nothing new. Only earlier this year, China announced stronger measures against crypto miners, causing the markets to sell off but rebound even stronger subsequently.
China not the only crypto-opposing nation
Recently, a Russian court threatened to close as many as 17 different crypto exchanges if the operators don’t delete their web pages. Roskomnadzor, the country’s telecom regulator, is entitled to blocking prohibited content, which the exchanges fall under according to the regional court’s ruling. That, of course, is not the first time websites with cryptocurrency content have been targeted by Russian regulators. Several exchanges have already faced the ban hammer, with the register of banned Russian websites listing 17 sites affected by these decisions.
Australia facing tough questions on crypto regulations
With authoritarian states like China and Russia coming out strong against cryptocurrencies, Australia will have to decide whether it wants to follow their example. To date, Australian regulation on cryptocurrency is still in its infancy, with Australian law not treating it as money and the Reserve Bank of Australia not having any official plans to release a central bank digital currency, unlike China or Russia.
However, a consistent position by federal regulators has been making the life of Australian blockchain startups unnecessarily difficult. Repeatedly, companies have asked for the introduction of fintech sandboxes that follow the example of the U.K. or Spain, but their demands have been met by silence. Introducing fintech sandboxes would allow businesses to test new ideas with lower compliance costs while allowing regulators to oversee new projects and monitor their real-world implications.
As of today, Australia finds itself in no man’s land between crypto adopters like El Salvador and crypto opponents like China or Russia. China adding cryptocurrency mining to its negative list is yet another incentive for Australian regulators to kickstart the long-overdue process of introducing clear rules for this emergent sector. Failure to do so risks more companies packing up and building the next phase of the internet elsewhere. Whether Australian regulators agree on that remains to be seen.
