After China cracking down on bitcoin mining, we now get information about the government of the Inner Mongolia region proposing eight new measures to slow down or phase out virtual currency mining activity. The Inner Mongolia region contributes 8% out of the entire 70% mining activity in China and it is believed to be rich in energy with more than 25,000 mining machines in the Ordos, a small town near Inner Mongolia.
The government has been planning to clear the bitcoin mines over the last two years, but they never put forth such measures before. At the time, many bitcoin mines were taking the advantage of government policies like big data analysis offered to high-tech companies. The machines work non-stop and account for $15.3 million in electricity bills for the entire year, but they barely contribute to the local economy.
Fast forward to April this year- the Inner Mongolia development and Reformation Commission has already issued several regulatory measures to help aid China to achieve its energy-saving goals. In fact, they had a plan to shut down all mining farms in the area by taking public feedback. They had given 2 months for miners to relocate and use other energy resources like hydropower for mining activity.
Some of the insiders of the Mongolia region have already mentioned that a majority of bitcoin miners relocated to other parts of China. This has been practically witnessed by the electricity trade department, as they believe an increase of 150% in bitcoin mining activity will take place using hydropower in 2021. That is why such measures by the local government don’t align with their previous statements about bitcoin mining affecting China’s carbon-neutral goal.
In 2019, the same committee did not eliminate crypto mining in their final reorganization guidance, and as a matter of fact, they did not even impose any restrictions. The local government tried several times to curb crypto mining activities, but they never came up with such a proposal to help China with their 14th five-year economic plan.
The entire process was already in the implementation stage for over two months now, but the provincial government has now come out with a draft to punish virtual currency mining. As it has already been circulating for quite a while now, we cannot consider this proposal to indicate there is still heavy mining activity going on using fossil power plants.
After translation- here is the full proposal including eight measures:
- For any industrial parks, data centers, power stations that provide the land and power support for crypto mining companies, there will be an intensified regulatory oversight based on the relevant laws such as China’s Energy Conservation Law and the Electric Power Law. For any entity that is intentionally hiding such activities or does not shut them down in time or does not hold a strong approval process, they will be held responsible based on the relevant regulations and the laws within the Communist Party;
- Supervising government agencies shall cancel any policy perks for any big data center or cloud computing company that is involved in crypto mining activities and they shall be dealt with accordingly based on the Energy Conservation Law;
- For any communications or internet companies that are involved with crypto mining conducts, the supervising government agencies shall discharge their telecommunications business licenses based on the Regulation on Telecommunications of the People’s Republic of China and they shall be dealt with accordingly;
- For any internet cafes that are involved in crypto mining activities, their supervising agencies shall suspend and rectify their businesses;
- For any entity that privately supplies energy to crypto mining activities without prior approval, they shall be handled by judiciary authorities based on China’s Criminal Laws;
- For any entity or individual that is involved in using virtual currency for illegal activities such as money laundering, they shall be handled by judiciary authorities based on China’s Criminal Laws;
- For any entity or individual that is involved in using virtual currency for fundraising activities, they shall be dealt with by their supervising agencies based on the Regulation on the Prevention and Treatment of Illegal Fund;
- For any corporation or related personnel that is involved in crypto mining business, they will be put into China’s List of Dishonesty. Any public servants who used their positions to provide convenience or protection for crypto mining activities will be handled by the relevant Discipline Inspection Committee under the Communist Party.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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