$BTC The People's Bank of China and seven other departments take strong action: continue to regulate virtual currency “mining” activities and strengthen the financial risk prevention line

On February 6, the People's Bank of China and seven other departments jointly issued the "Notice on Further Preventing and Managing Risks Related to Virtual Currencies," clearly stating that virtual currency “mining” activities will be continuously regulated through multiple measures such as shutting down existing operations, implementing new controls, and banning services. This further tightens the regulatory red line for virtual currency “mining,” demonstrating China's firm commitment to preventing and resolving financial risks related to virtual currencies and maintaining economic and financial order.

Virtual currency “mining” is essentially the process of competing for ledger rights using specialized computers to obtain virtual currency. It harbors multiple risks and has long been a key focus of regulatory attention. In terms of resource consumption, “mining” relies on high-performance computing equipment, consuming large amounts of electricity, which runs counter to China’s “dual carbon” goals and green development principles. Some regions have even experienced illegal electricity use and competition for civilian power resources, seriously disrupting energy supply order. From a financial risk perspective, virtual currency prices are highly volatile, and “mining” activities are often accompanied by speculative trading, illegal fundraising, money laundering, and other illegal activities. These not only pose risks of financial loss to investors but also threaten the normal order of financial markets and financial security. Additionally, the entire chain of “mining” industry—production, sales, hosting—can lead to illegal operations and technological abuse, forming a risk transmission chain that endangers social stability.

This joint notice from the eight departments builds on previous regulatory policies, further refining and upgrading them to establish a comprehensive regulatory system. The notice clarifies that the National Development and Reform Commission will continue to lead the “mining” cleanup efforts, with provincial governments responsible for overall coordination within their jurisdictions. They must strictly follow the requirements of the “Notice on Regulating Virtual Currency ‘Mining’ Activities” (Fagai Xingyun [2021] No. 1283) and the “Guidance Catalog for Industrial Structure Adjustment (2024 Edition),” thoroughly review and investigate existing virtual currency “mining” projects to ensure all are shut down and cleared. No new “mining” projects are allowed in any form, to prevent new risks from emerging at the source. For the “mining” industry chain, it is explicitly prohibited for domestic producers to provide sales, hosting, maintenance, and other services, cutting off the supply chain of the “mining” industry and achieving comprehensive control from project to equipment, from production to service.

This regulatory upgrade is not a short-term measure but a continuation of China’s long-term effort to address risks related to virtual currencies. Since 2021, when virtual currency “mining” was classified as a phased-out industry, China has continuously intensified its crackdown, shutting down illegal “mining” projects in many regions, and cleaning up illegal mining equipment channels, achieving significant results. The joint issuance by the eight departments further enhances regulatory coordination, forming cross-departmental and cross-regional enforcement efforts to prevent regulatory gaps and demonstrates China’s “zero tolerance” stance on cracking down on virtual currency “mining.”

For market participants and the general public, it is essential to recognize the risks and illegal nature of virtual currency “mining.” Relevant enterprises should proactively cease “mining” operations and refrain from participating in illegal activities such as mining equipment production and sales. Investors should abandon speculative mindsets of “profit from mining,” recognize the illegality of virtual currency “mining” and trading, and avoid financial losses caused by involvement in related activities. Meanwhile, if the public discovers illegal “mining” or illegal sales of mining equipment, they should actively report to relevant authorities to jointly maintain a healthy market order.

Virtual currency “mining” activities contradict green development concepts and pose significant financial risks. The ongoing cleanup work is a heavy and long-term task. The joint efforts by the eight departments to deepen the regulation of “mining” are necessary measures to prevent financial risks and are also important guarantees for promoting green and low-carbon development and maintaining social and economic stability. In the future, with the continuous implementation of regulatory policies and strengthening enforcement, the virtual currency “mining” industry will be further regulated and cleaned up, making China’s financial security barrier more solid and creating a safe and stable environment for high-quality economic development.