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China’s largest bitcoin producer provinces have stepped up their crackdown on cryptocurrency mining by showing how global authorities are positioning themselves in the face of fast-growing digital asset markets.
The country’s bitcoin mining operations, a puzzle-solving process that creates new units of virtual currency, have been starving to death since May when the government confirmed a ban on cryptocurrency transactions and warned of the dangers of using them for payments. . Bitcoin prices fell after the announcement and are currently trading at about $ 30,000 below the April peak of $ 65,000.
China’s recent intervention puts more pressure on digital markets to market and exploit what was once the most vibrant market in the world. At one time, many governments were studying the impact of the industry on the environment and were determining the types of financial oversight that should be applied to cryptocurrencies.
Earlier this month, global regulators called for the toughest digital currencies rules of bank capital any asset, the Bank of Basel’s Supervisory Committee warned, said the growing use of cryptocurrencies “has problems worrying financial stability”.
A wave of despair has shaken the Chinese cryptocurrency mining community this week after officials from all Chinese mining operations centers Inner Mongolia and released more measures aimed at bitcoin creators. The northern region banned mining and introduced a landline phone in May to report alleged operations.
Sichuan, a province enriched by southwest China’s hydroelectric power plant, has ordered the shutdown of 26 major local mines under investigation, according to a meeting of the Energy Bureau of the Development and Reform Commission, Chinese media reported on Friday.
The probe, which will run until June 25, has been warned by many bitcoin miners that it was time to gather and relocate outside of China.
A video of workers at a large mine shutting down computer servers appeared to capture the definitive meaning, and Chinese cryptocurrency fans spread it on the net.
As a result of the abundant supply of renewable energy supplied from a wide network of dams, Sichuan was considered a last resort for mining operations, from coal-fired power plants in the provinces.
The governments of the most important cryptocurrency mining locations in Xinjiang, Yunnan and Qinghai also announced this month that underground mining operations.
Local governments are under pressure from Beijing to reduce energy intensity – carbon dioxide emissions per unit of gross domestic product – China wants to reach and reach peak greenhouse gas emissions by 2030carbon neutrality”For 2060.
Analysts have regularly stated that it is the execution of computers needed for bitcoin production bad for the environment. The University of Cambridge’s Bitcoin Electricity Consumption Index suggests that bitcoin mining consumes 133.68 terawatt hours of electricity per year, more than Sweden did last year.
Proponents of crypto mining, however, say that at least some of the energy used is from clean sources, as some of it is often left untapped because it is in areas outside the typical energy networks.
Although measures were taken in 2017 to reduce bitcoin trade and investment, China continued to be the world’s leading hub for bitcoin creation and reached 75% of world mining, according to preliminary estimates.
Guan Dabo, an economist at Beijing’s Tsinghua University and author of a study calculating the contribution of bitcoin mining to China’s carbon emissions, said the move to a place with a cleaner electricity supply only served as a temporary commitment.
“[Bitcoin mining] it does not benefit the nation’s economic or social development, ”he said.“ On the other hand, it consumes a lot of electricity that could be used for other purposes, especially at a time when the provinces are facing off. electricity shortage“.
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