Over 90 percent of China’s Bitcoin Mining Will Be Closed After Sichuan Ban

Many Bitcoin mines in southwestern China’s Sichuan state — among China’s biggest crypto mining centers — were shut on Sunday after local authorities ordered a halt to mining in the region on Sunday. Friday.

And as detected, more than 90 percent of China’s Bitcoin mining is going to be closed down after the Sichuan ban

Over 90 percent of China’s Bitcoin Mining Will Be Closed After Sichuan Ban

The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Administration issued a joint note on Friday, ordering local electricity companies to “refine, clean up and terminate” their actions. Mining on Sunday.

The notice also requires local electricity companies to immediately cease providing power to cryptocurrency mining jobs they’ve found, and run self-inspection and remediation, and report the outcome of the investigation. them on Friday. In addition, it prohibits local governments from approving new mining jobs.

Mining ban in Sichuan means more than 90 percent of China’s Bitcoin mining capability is estimated to be closed down, at least in the short term, as regulators in other significant mining hubs in the area China’s north and southwest have taken similarly harsh actions.

Over 90 percent of China’s Bitcoin Mining Will Be Closed- The Last Exit for Chinese Miners Closed

Some in the industry had expected that regulators in Sichuan, home to many hydropower plants, could take a softer approach. But the latest prohibit underscores the conclusion of Chinese regulators to restrict speculative cryptocurrency trading to control financial risks, despite certain advantages to local economies. , observers said.

“The exit is closing and we are trying to find overseas mines to put our mining equipment,” a Sichuan-established industry insider told the Global Times on condition of anonymity. on Sunday. He also added that some miners had suffered huge losses.

“We had hoped that Sichuan would be an exception during the containment period because there is an excess of electricity in the rainy season. But Chinese regulators are now adopting a unified approach that will overhaul and rein in the booming Bitcoin mining industry in China.” Shentu Qingchun, CEO of Shenzhen-established blockchain firm BankLedger, told the Global Times on Sunday.

Bitcoin mining pools backed by Chinese businesses, for example Huobi Pool, Binance, and AntPool, have experienced a 20% to 40% fall in their real time hash rate within the previous 24 hours, according to media reports.

Northwestern China Xinjiang Autonomous Region, North China Inner Mongolia Autonomous Region, and Southwest China Yunnan Province have announced rules limiting Bitcoin mining.

“That means more than 90% of Bitcoin mining capacity, or a third of the processing power of the global cryptocurrency network, will be suspended in the short term. As a result, Chinese miners must form alliances to migrate abroad, to places like North America and Russia,” Shentu noted.

He added that the purchase price of miners may fall in the short term, as many crypto miners will sell processing gear, but the market eager to digest the oversupply will stay warm. That will also decrease upstream supply.

Wang Peng, an assistant professor in the Gaoling School of Artificial Intelligence in China’s Renmin University, told the Global Times on Sunday the Chinese government’ move is in accordance with the fact that international financial regulators The need to tighten oversight of electronic currency transactions, to be able to avoid financial risks and illegal activities like money laundering.

In May, senior Chinese officials contended that it was necessary to crack down Bitcoin mining and trading, and resolutely prevent the transmission of personal risks to the entire society.

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