This might be yet another big blow for bitcoin as China starts cryptocurrency crackdown in other provinces as well. Bitcoin was going strong at the start of this year but has since taken multiple blows. Tesla stopped accepting bitcoin touting environmental concerns, Iran banned mining due to the high energy requirements of the summer months, and now China has joined the party.
China vowed last month to crack down on bitcoin mining operations and trading as part of its measures to control and mitigate financial risks associated with cryptocurrency trading. This crackdown has now been extended to another province, namely, the southwest province of Sichuan. Authorities have ordered cryptocurrency mining projects to be closed in major mining centers.
The move happened last Friday, in Sichuan. Miners there mostly made use of hydropower to provide electricity to their mining rigs. They used them to verify bitcoin transactions. Other regions affected by the mining crackdown also include Inner Mongolia where a campaign against mining was started last month, a few days after Beijing’s initial announcement. The campaign published draft rules to root out the business.
The Inner Mongolia Development and Reform Commission said in the rules that telecommunications companies and internet firms which are engaged in crypto mining will have their business licenses revoked by regulators.
A similar thing happened in Sichuan last Friday. The Sichuan Provincial Development and Reform Commission issued a joint notice with the Sichuan Energy Bureau which demanded that around 26 cryptocurrency mining projects be closed by Sunday. We aren’t sure if all 26 have complied but we’ll update you on the details as soon as we receive them.
According to data provided by the University of Cambridge, China’s Sichuan province is the country’s second-biggest cryptocurrency mining province with miners trying to make full use of the province’s rich hydropower resources. The authorities have now urged local governments in Sichuan to start combing the province for miners and shut them down. Some new projects have already been banned.
The crackdowns have forced miners to find alternatives and move elsewhere. Maybe some of them will even consider leaving for El Salvador. Bitcoin has now become a legal tender in the country. Their president even announced that they are making a mining facility powered by geothermal energy.