Authorities in the country’s northwestern province of Qinghai – and a district in neighbouring Xinjiang – ordered cryptocurrency mining projects to close this week with Beijing intent on cleaning up the sector
Local authorities answered Beijing’s call to move in on cryptocurrency mining operations this week banning new projects and shutting down existing sites.
China accounts for over half of global bitcoin production but now some miners are considering moving elsewhere after the State Council, China’s cabinet, vowed to clamp down on bitcoin mining and trading last month.
“Many miners now are seriously re-evaluating their future operational plans as the current regulatory environment is unfavourable for their growth and the scaling of their business,” said Lei Tong, Managing Director Financial Services at Babel Finance, a Hong Kong-based crypto lender and asset manager.
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It was reported that the Qinghai office of China’s Ministry of Industry and Information Technology, ordered a ban on Wednesday of new cryptomining projects in the province, and told existing ones to shut down.
Cryptominers who set up projects claiming to be running big data and super-computing centres will be punished, and companies are barred from providing sites or power supplies to mining activities.
The Development and Reform Commission of Xinjiang’s Changji Hui Prefecture also sent out a notice on Wednesday ordering a clean-up of the sector.
COMPUTING POWER
Cryptomining projects in Xinjiang’s national Zhundong Economic-Technological Development Park were ordered to close.
Xinjiang is China’s biggest bitcoin mining centre, accounting for about a third of total computing power. Qinghai is in ninth place, according to data compiled by the University of Cambridge.
China is stepping up a clampdown on cryptocurrencies after a global bull run in bitcoin prices rekindled local speculation.
GLOBAL SELL-OFF
As well as the move by the State Council, three industry bodies banned crypto-related financial and payment services, one factor behind a global sell-off that briefly wiped $1 trillion off crypto market capitalisation.
Other local governments have already responded. Inner Mongolia, China’s third biggest mining centre, has published draft rules to root out the business and authorities in Sichuan, in second place, have announced a probe into the sector.
“Scouting for new destinations is truly happening on a global scale with North America and Europe among the most sought after places, followed by countries in Central Asia and the Middle East,” said Tong of Babel Finance.
- Reporting by Reuters
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