In-Depth Reporting Uncovers the Reality
For instance, there is an official policy in China mandating that all banks must simplify the process for customers to obtain legally certified documents. Nevertheless, in most municipalities, private banks do not adhere to this regulation, often imposing additional hurdles. For example, if a family member passes away and you need to claim their remaining bank balance, the bank might insist, “your death certificate is insufficient.” There have been instances where grieving individuals were required to bring the deceased to the bank for proof. I kid you not.
In China, it’s typical for policies to state one thing while the actual implementations can be vastly different.
Let’s begin with what mainstream media has reported.
More developed cities will adhere to the regulations as written. Yet, in China, a majority of mining is currently occurring in Inner Mongolia, away from the larger urban centers. In these areas, cultural dynamics supersede government regulations; if you have the right connections, you can find ways to bypass the legislation.
Societal Elements and Legal Nuances
Cambridge statistics revealed that by December 2021, China still accounted for 19.1% of the global hashrate. It wasn’t until May 2022 that CNBC published a comprehensive report on the significant Bitcoin mining hashrate still functioning in China, even though this information had been accessible to all media outlets since September 2021.
To summarize:
With the exception of the New York Times report, the data suggests that mining was never entirely banned, but only suspended. Let’s delve deeper into the New York Times article and the document they reference as justification for a ban.
The Chinese policy document from September 24, 2021, does not impose a ban, but instead indicates a halt on the formation of any new mining operations, along with a “signal of intent” (not a ban) to “at some future point” grandfather existing mining activities (which, three years later, still has not taken place).
Regarding the statement of intent: the policy articulates that bitcoin mining sites are to be phased out gradually, as they are inconsistent with the Chinese Government’s carbon neutrality objectives. Additional reasons include their potential for money laundering and significant electricity consumption.
Source: bitcoinmagazine.com
Initially, NBC stated in May 2021 that some miners were “unaffected” by the recent “ban”. Then, the New York Times mentioned a “ban” in China in September 2021, referring to a policy announcement from the Chinese Government (more on this later), despite publicly available data from Cambridge indicating that mining activities had already climbed back to 22.3% of the global hashrate that same month.
Upon reviewing the document cited by the New York Times as evidence for a ban, it did not corroborate their interpretation.
- Mining was never completely banned; instead, there was a moratorium on new operations and unfriendly intentions regarding grandfathering in existing facilities at some future date.
- The use of fossil fuels was cited as the main reason (although insiders from the Communist party have indicated that while this was indeed a factor, capital control was the primary motivation). Energy policy expert Magdalena Gronowska has validated this perspective.
- Outside of coal-based mining, the moratorium was not enforced in the more remote regions, where new mining activities have emerged.
- The New York Times did not accurately represent the Chinese policy document, overlooked cultural factors that made even the moratorium less likely to be enforced, and failed to verify publicly available hashrate data that would have indicated that substantial mining activity was ongoing in China.
Generally, in more developed cities, laws are enforced strictly. However, in smaller towns and rural regions, this is rarely the case.
