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Issued on: 06/21/2021 – 08:38 Modified: 06/21/2021 – 08:36
Beijing (AFP)
China has widened the crackdown on its massive cryptocurrency mining industry with a mine ban in a key southwestern province.
Chinese mines fuel nearly 80% of global cryptocurrency trade despite a domestic trade ban since 2017, but in recent months several provinces have ordered mines to close as Beijing keeps a close eye on the industry.
Authorities in Sichuan province ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner.
The notice reportedly asked power companies to stop providing electricity to all cryptocurrency mines by Sunday.
He promised a “full cleanup” and ordered local governments to conduct a “backlog” to find and shut down suspected crypto mines.
The province is one of the largest mining bases in the country.
A former cryptocurrency miner told AFP that he had “shut everything down” as required in recent days.
“Working groups have come to check (…) make sure we are shutting down operations and removing machines,” he said.
Sichuan, a mountainous region in southwest China, is home to a large number of cryptocurrency mines, which require a colossal amount of energy supplied by the province’s cheap and plentiful hydropower.
According to a report by the state tabloid Global Times, the closure of mines in the province has shut down more than 90% of the country’s Bitcoin mining capacity.
Beijing has set its sights on cryptocurrency miners to eliminate the financial risks of speculation, although environmental concerns over energy-consuming mines are also a factor.
Chinese media reported that the electricity supply to all crypto mines across the province was shut down at midnight on Sunday, as the topic was in vogue on social media.
Sichuan is China’s second most intensive mining region after Xinjiang in the northwest of the country, according to the University of Cambridge’s Bitcoin electricity consumption index.
All crypto mines in sparsely populated but coal and hydropower rich areas of Inner Mongolia and Qinghai have also been ordered to shut down in recent months, with citizens encouraged to report illegal mines.
Bitcoin’s value plunged last month after three Chinese financial associations reaffirmed the ban on financial institutions from offering cryptocurrency services, warning against risky speculation by cryptocurrency traders.
China is in the midst of a sweeping regulatory crackdown on its fintech industry, whose biggest players – including Alibaba and Tencent – have been hit with heavy fines after being convicted of monopoly practices.
AFP 2021
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