Chinese local government of Sichuan province has turned hostile towards the booming Bitcoin mining operations and issued a notice proposing a ban on the sector.
The notice has been issued by the financial administrator of the Sichuan province, ordering all subordinate offices to ensure that the hydroelectric power plants should stop investment in digital currency mining projects and also stop adding new mining projects.
The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation
Failing to follow the local authorities’ order would end up in an investigation on the hydroelectric power plant for illegal construction projects, along with bans, fines, self-demolition, and other administrative measures.
The Financial Administrative of the #Sichuan providence of #China has issued a notice to its subordinate offices ordering them to “guide mining entities to end their mining activities in an orderly manner”. The province accounts for about 9.66% of the global #mining power. pic.twitter.com/mVtihdf9px
— PANews (@PANewsOfficial) May 22, 2020
However, it is not clear whether the proposed rules will be implemented only on hydroelectricity power plants or also on the already operating Bitcoin mining farms.
A key region for China’s Bitcoin mining industry
Sichuan is producing almost 10 percent of China’s total hash power, becoming the second province with Bitcoin mining demand only following Xinjiang.
The notice came when the rainy season in the province is approaching which usually sees a massive surge in hydroelectricity production, resulting in the cheap distribution of power to the Bitcoin mining farms.
According to industry experts, this local notice might result in the ending of the rainy season subsidy in electricity costs to the Bitcoin mining farms, not a complete ban on the entire industry.
Though China remains the leading contributor to the Bitcoin mining hash rate, many other regions are also becoming popular for Bitcoin mining.
Many commercialized mining farms have been set up in Canada and also in the United States. Iran has completely regulated the sector and recently handed a license to a mining facility with 6,000 mining devices – one of the largest Bitcoin mining facilities in the region.
Source: Read Full Article