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China to shut down over 90% of its Bitcoin mining capacity after local bans
21

Jun, 2021

Many Bitcoin mines in Southwest China's Sichuan Province - one of China's largest cryptocurrency mining bases - were closed as of Sunday, according to after local authorities ordered a halt to mining in the region on Friday amid an intensified nationwide crackdown against cryptocurrency mining.


The ban also means that more than 90 percent of China's Bitcoin mining capacity is estimated to be shut down, at least for the short term, as regulators in other key mining hubs in China's north and southwest regions have taken similar harsh steps.

Some industry players had hoped that regulators in Sichuan, where hydropower is abundant, could take a softer approach. But the latest ban underscores Chinese regulators' determination to curb speculative crypto trading to control financial risks, despite certain benefits to local economies, observers said.

The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice on Friday, ordering local electricity companies to "screen, clean up and terminate" mining operations by Sunday.

The notice listed 26 firms that had been inspected and reported as potential cryptocurrency mining enterprises, including Heishui Kedi Big Data Tech Co and Kangding Guorong Tech Co.

The notice also ordered local electricity companies to immediately stop supplying power to crypto mining projects they have detected, and conduct self-inspection and rectification, and report their results by Friday. Also, it banned local authorities from approving new mining projects.

Chinese companies-backed Bitcoin mining pools, such as Huobi Pool, Binance and AntPool, have experienced a 20 percent to 40 percent plunge in their real-time hash rates within the past 24 hours, according to media reports.

Northwest China's Xinjiang Uygur Autonomous Region, North China's Inner Mongolia Autonomous Region and Southwest China's Yunnan Province have all announced rules curbing Bitcoin mining.

That means that more than 90 percent of Bitcoin mining capacity, or one-third of the global crypto network's processing power, will be suspended in the short term. As a result, Chinese miners must form alliances to migrate overseas, to places such as North America and Russia.

The Chinese authorities' move is in line with global financial regulators' tightened scrutiny of digital currency trading, to prevent systemic financial risks and illegal activities such as money laundering.
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