China intensifies crackdown on Bitcoin mining industry

China’s largest bitcoin-producing province has intensified a crackdown on crypto-mining in the latest sign of how global authorities are tightening their stance in the fast-growing digital asset markets.

Bitcoin mining in the country, the energy-hungry process of solving computational puzzles that creates new units of the virtual currency, has been on the decline since May when the government confirmed a ban on cryptocurrency transactions and warned of the risks of using them for payments. Bitcoin Prices dropped Following the announcement, it is currently trading at about $30K below the April peak of around $65K.

China’s recent intervention is putting more pressure on what was once one of the world’s most active markets for cryptocurrency trading and mining. It comes at a time when many governments are examining the industry’s impact on the environment and determining the types of financial control that should be applied to cryptocurrencies.

Earlier this month, global regulators called for the toughest digital currencies to hold Banking Capital Rules of any origin, with the Basel Committee on Banking Supervision warning that the increased use of crypto assets “has the potential to raise financial stability concerns.”

A wave of desperation hit the cryptocurrency mining community in China this week after officials in all the mining operations centers in China followed suit Inner Mongolia He issued more measures targeting bitcoin creators. The northern region banned mining and set up a hotline to report suspected operations in May.

Sichuan Province, a hydropower-rich province in southwest China, has ordered its 26 largest domestic mines to stop working while an investigation is under way, after a series of meetings held by the energy bureau of the local Development and Reform Commission, Chinese media reported Friday.

The investigation, which will run until June 25, was taken as a warning by many bitcoin miners that it is time to pack up and move them out of China.

A video of employees at a large mine shutting down their computer servers seems to capture the sense of ultimate value and has been widely shared by Chinese crypto enthusiasts across the internet.

Due to its abundant supply of renewable energy from its extensive dam network, Sichuan has been seen as a last resort for mining operations pushed out of provinces that rely on coal-fired power plants to generate electricity.

Governments in leading crypto-mining locations in Xinjiang, Yunnan and Qinghai also this month announced plans to shut down mining operations.

Local governments are under pressure from Beijing to reduce energy intensity – carbon dioxide emissions per unit of GDP – as China aims to reach peak greenhouse gas production by 2030 and achieve “carbon neutralityby 2060.

Analysts regularly point out that running the computers needed to produce bitcoin is a good thing أمر harmful to the environment. The University of Cambridge’s Bitcoin Electricity Consumption Index indicates that Bitcoin mining consumes 133.68 TWh of electricity annually, more than Sweden last year.

However, crypto-mining advocates say that at least a portion of the energy used comes from clean sources, some of which may not have been tapped because they are in areas outside of typical power grids.

Despite measures taken in 2017 and 2019 to limit bitcoin trading and investment, China remained the main global center for bitcoin creation and accounted for up to 75 percent of the world’s mining, according to pre-campaign estimates.

Guan Dabo, an economist at Tsinghua University in Beijing and author of a study estimating the contribution of bitcoin mining to China’s carbon emissions, said that reallocating miners to a place with a cleaner electricity source served only as a temporary compromise.

“[Bitcoin mining] It does not benefit national economic development or social development. On the other hand, it consumes a lot of electricity that can be used for other purposes, especially at a time when the provinces are facing Electricity shortage. ”

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