The Chinese government never had a particularly friendly position towards Bitcoin and cryptocurrencies. Despite this, until this year, it’s been the bigger Bitcoin mining center in the world. We can highlight until this year, though. Just recently, the authorities in the provinces Inner Mongolia, Qinghai, Xinjiang, Yunnan, and Sichuan have been taking actions to ban or seriously limit the Bitcoin mining operations.
Inner Mongolia was the first one, but the other territories have been joining the actions. Yunnan didn’t do it directly, but its new measures to crack down on mines that bypass the state grid by striking supply deals with power stations will also affect entire mining farms.
Sichuan is only the last one on the list, but probably won’t even be the last of all. According to an announcement by Sichuan National Development and Reform Commission and Sichuan Energy Bureau:
“The local governments, with assistance of the State Grid and Sichuan Energy Investment Group, will filter out, clean up and shut down 26 companies that have been inspected and reported as potential crypto mining projects by the Sichuan branch of the State Grid by June 20. The National Development and Reform Commission will monitor the electricity usage and the shutdown, and make daily reports.”
Additionally, it’s been established that all energy providers must investigate their clients. If they’re using the power to mine cryptocurrencies, the companies should cut off their supply immediately. The local governments will be doing inspections to close more mining farms as well.
At least in the last year, according to the Bitcoin Mining Map by Cambridge, this country accounted for 65% of the total BTC hashrate. And Xinjiang, Sichuan, Inner Mongolia, Yunnan, and Beijing were the main mining provinces.
Bitcoin exodus from China
Chinese citizens have been very receptive to Bitcoin since the beginning. Years ago, when the Initial Coin Offerings ( ICOs), the payments, and crypto-exchanges were allowed in the country (around 2015), 80% of Bitcoin volume was exchanged into and out of Chinese yuan (CNY). That changed in 2017.
Since that year, ICOs and cryptocurrency exchanges are banned in the territory. Now, since last month, Bitcoin payments are banned too, and it seems like the authorities are aiming to completely ban Bitcoin mining as well. Chinese citizens have been very receptive to Bitcoin, but the government won’t allow further growth.
That’s why so many crypto-companies and Bitcoin miners have emigrated and will continue to emigrate from the Asian nation. To date, some people bet for the United States (especially Texas) as the next great Bitcoin mining center. El Salvador, which now has Bitcoin as legal tender and it’s planning to mine with geothermal energy, could be another popular destiny in the future.
In the meantime, as it happened in 2017 with the ICOs and exchange ban in China, Bitcoin price has suffered the consequences. After an increase to over $41,000 per token starting the week, BTC has lost 17%. It’s slowly recovering again, though.
Featured Image by Alexas_Fotos / Pixabay
Originally published at https://blog.alfa.cash on June 18, 2021.