Main navigation

Chinese Province to Curb Electricity for Miners

News
Mon, 11/30/2020 - 19:04
article image
Alex Dovbnya
One of the largest Chinese mining hubs has banned power stations from supplying energy to Bitcoin miners
Chinese Province to Curb Electricity for Miners
Cover image via stock.adobe.com
Read U.TODAY on
Google News
Contents

According to a recently surfaced document shared by Chinese reporter Colin Wu, Baoshan, a city in the southern Chinese province of Yunnan, has prohibited local power stations from supplying electricity to Bitcoin miners. 

Any grid-connected station that will not stop supplying power will be deemed illegal by a power company.     

China’s strained relations with miners 

Last April, the country’s state planner floated the idea of banning Bitcoin mining due to its adverse environment impact. However, as reported by U.Today, it never made it to the list of industries that have to be eliminated.

This August, Inner Mongolia, an autonomous region that also happens to be a major mining hub, revoked subsidized electricity rates for miners.      

China phasing out the mining industry would potentially lead to a huge shift in the whole crypto market given that it controls over 65 percent of the total Bitcoin hashrate.       

16
Image by scmp.com

While Chinese miners continue to run the show, existing cryptocurrency curbs still make it difficult for them to operate. Earlier this month, Wu revealed that local miners were struggling to pay their electricity bills due to banks freezing accounts involved in making OTC trades.

Since September 2017, cryptocurrency exchanges have been outlawed in China.

Related
Former Ripple CEO Believes Bitcoin Can Be Destroyed by China

No political motives

The Yunnan ban, however, should not be treated as a harbinger of a wider regulatory crackdown on the industry, according to Wu. He claims that the move is actually economically motivated:

“There is no need to overestimate the impact of this incident. The attitude of China local power companies towards crypto mining is often changing. It is more a demand for economic interests than political pressure.” 

article image
About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.