Cryptocurrency mining is big business in China, accounting
for more than half of global Bitcoin production. But the State Council, China's
cabinet, last month vowed to clamp down on Bitcoin mining and trading as part
of a series of measures to control financial risks. Bitcoin price in India
stood at Rs. 25.3 lakhs IST as of 11am on June 21.
Other popular mining regions, such as Inner Mongolia, have
cited cryptocurrency mining's use of electricity generated from highly
polluting sources such as coal in orders targeting the industry.
Friday's move in Sichuan - where miners mostly use
hydropower to run the specially designed computer equipment used in verifying
Bitcoin transactions - suggests the crackdown is more broadly based.
The Sichuan Provincial Development and Reform Commission,
and the Sichuan Energy Bureau issued a joint notice, dated Friday and seen by
Reuters, demanding the closure of 26 suspected cryptocurrency mining projects
by Sunday.
Sichuan is China's second-biggest Bitcoin mining province,
according to data compiled by the University of Cambridge. Some miners move
their activities there in the rainy summer to take advantage of its rich
hydropower resources.
The notice orders state electricity companies in Sichuan to
conduct inspections and make corrections, reporting their results by Friday.
They are to immediately stop supplying electricity to cryptocurrency mining
projects they have detected.
The authorities urged local governments in Sichuan to start
combing for cryptocurrency mining projects and shut them down. It banned new
projects.
Other regional mining centres including Xinjiang, Inner
Mongolia, and Yunnan have ordered crackdowns on Bitcoin mining.
Friday's notice appears to indicate that Beijing's
displeasure with cryptocurrency mining extends beyond cases where it uses
electricity generated by burning coal.
"Renewable power does not help," said Winston Ma,
NYU Law School adjunct professor and author of the book "the Digital
War".
"The four largest mining regions - Inner Mongolia,
Xinjiang, Yunnan and Sichuan - have implemented similar crackdown measures,
even though mining in the latter two are mostly based on hydropower, whereas
the first two are on coal," Ma told Reuters.
Some miners have been considering moving elsewhere due to
the crackdown.
© Reuters