The Chinese crypto mining crackdown is beginning to gather pace — with a few areas full of hydropower seeking to combine coal-powered areas in what is increasingly looking like a nationwide shutdown of mining. Along with the US is using this chance to compete.
As previously reported, Sichuan Province — a hydropower and crypto mining hotspot — has previously appeared content to permit miners to keep unfettered in the area, particularly as the summer typhoon season starts.
During this time, which runs until mid-September, rivers in the area typically swell and collect pace, producing large quantities of surplus electric power. In the last several years, that surplus has often been upward by miners, buying power at rock-bottom rates.
But each The Paper, a lot of miners in Ya’an, in Western Sichuan, have reported that their facilities have been forcibly closed. One claimed his mining operations were shut down on June 17,”in line with federal government policies.”
Another miner based away from the city stated that their operations had already been closed, while the press outlet added that a”one-size-fits-all” policy was now active in the province, together with industrial operators informed that they”must shut down until June 25.”
The same media said it had evidence that Sichuan Province had”recently issued a notice requiring power generation businesses to conduct audits,” and”immediately stop providing power to mining jobs,” within an”uncompromising national cleanup.”
Meanwhile, Bloomberg noted that”at least one Bitcoin miner” was”informed by an official” from the town government of Ya’an that the town was ready to”root out all bitcoin (BTC) and ethereum (ETH) mining operations within one year.” Quoting a”individual with knowledge of the situation,” the press outlet explained that miners were put on alert, although a press spokesperson for the town stated they were not aware of the policy.
Another report, from PA News, quoted another unnamed source as saying Sichuan miners have been ordered to shut off their rigs in preparation for inspections — adding that”all mining centers” (including those utilizing hydropower) has to be closed down by June 25.
Read the full notice below:
Notice from the Sichuan National Development and Reform Commission and Sichuan Energy Bureau About Cleaning Up and Shutting Down Crypto Mining Projects
Municipal and city governments, the State Grid Corporation of China in Sichuan, Sichuan Energy Investment Group, central electricity companies in Sichuan and provincial state-owned electricity companies:
Based on the provincial government’s 73rd routine meeting and the requirements to crack down on bitcoin mining from the 51st meeting by the Financial and Development Committee of the State Council, we have issued the following:
1. Complete the process to filter out and shut down crypto mining companies
The local governments, with assistance of the State Grid and Sichuan Energy Investment Group, will filter out, clean up and shut down 26 companies that have been inspected and reported as potential crypto mining projects by the Sichuan branch of the State Grid by June 20. The NDRC will monitor the electricity usage and the shutdown, and make daily reports.
2. Carry out self-inspection among electricity companies in Sichuan
Central electricity providers in Sichuan and provincial state-owned electricity companies should investigate their clients and immediately cut off their electricity supply once found to be mining projects during the inspection. The companies should enforce the crackdown issued by the government without any discount and report their inspection results to the NDRC before June 25.
3. A comprehensive cleanup and inspection
Local governments should immediately cast a net to inspect and must immediately close the crypto mining projects found during the inspection. The local governments are required to report the results to the NDRC before June 25. Local governments are not allowed to approve any crypto mining projects.
4. Make clear the responsibilities of the entities that are carrying out the crackdown
Local governments are the ones that are responsible for the crackdown. The local governments must be more aware of their political stance, must guarantee the quality and quantity of the task and must maintain social stability.
China’s loss could place to become America’s profit, though — CNBC reported that the crypto-keen Mayor of Miami Francis Suarez has sought to lure miners fleeing the crackdown to set up shop in town, which has abundant nuclear power. Suarez told the press network:
“we would like to be certain that our town has an chance to compete. We’re talking to lots of organizations and telling them,’Hey, we want you to be here.’ The fact that we’ve got nuclear energy means that it has very inexpensive power.”
The same media outlet reported that Texas is another likely destination for relocating miners, due to the fact that it offers”some of the world’s cheapest energy prices,” using 20% wind power production as of 2019.
The press outlet also mentioned:
“[Texas] has a deregulated energy grid that lets customers choose between power providers, and crucially, its political leaders are very pro-crypto — fantasy conditions for a miner looking for a kind welcome and inexpensive energy sources.”
Meanwhile, Texas’ main power grid struggled to keep up with the demand for electricity Monday, prompting the operator to request Texans to conserve power until Friday, per The Texas Tribune.
And Travis Kling, the Founder and Chief Investment Officer at Ikigai Asset Management, remarked that crypto community members should”keep paying close attention to this situation,” as”it’s a big thing.”
He also wrote:
“While it’s always hard to get a fantastic read on exactly what’s going on in China, if the Chinese Communist Party is making a big concerted effort to curtail crypto action of all types, that is one of the biggest market shifts lately.”