BitOoda Mining Regulatory Update, 6/9/21: Chinese Provinces Taking Concrete Steps to Implement Mining Ban
China’s provincial authorities are taking tangible steps to implement last month’s announcement from Beijing of a national ban on crypto mining and trading:
- Qinghai province on Wednesday issued a document banning virtual currency mining operations.
- The government in Xinjiang (which some estimates say hosts as much as 40% of the bitcoin network’s total hash rate) are shutting down the mining hub in the Zhundong Economic Technological Development Park.
- Inner Mongolia is implementing new regulations around energy-consuming firms.
- There are indications that Sichuan, another major bitcoin mining hub, is actively looking at its policy toward mining in the region.
The announcement out of Qinghai, which we assess could be indicative of the tone and approach likely to be taken in multiple provinces, prohibits local authorities from setting up or permitting new mining projects, closes down all existing mining operations in the province, and states it will inspect and punish any projects that operate mining activities “disguised” as big data or supercomputing centers. The announcement, similar to those from the other provinces, cites the central government’s concerns about the environmental impact of mining and the need to maintain financial stability.
We expect these new actions by Chinese provinces will have an increasingly-significant impact on global hash rate.
We are fielding a number of inquiries from clients and partners, and holding a number of discussions on potential opportunities with participants across the mining ecosystem as rig prices, availability, potential migrations, and other aspects of mining economics continue to change. We will continue to disseminate our analysis and research, as the situation remains dynamic.