Bitcoin Mining Support in Sichuan Attracts Too Much Attention – Fresh Crackdown Ahead?
The Chinese province of Sichuan, the world’s bitcoin mining capital, has reportedly asked local governments to guide bitcoin mining operations to make an orderly exit from the business.
According to the leaked document online, it says that some companies are taking advantage of and overly advertising recent policies about local governments’ public support for the blockchain industry (bitcoin mining) in order to lure investors to invest in cryptocurrencies and conduct illegal fundraising.
The notice has since surfaced which indicates that the province’s top finance regulator, Sichuan Financial Office has requested local governments to make an orderly exit from supporting bitcoin mining.
The notice reportedly issued to all local offices of the financial regulator went on to request that regional governments use mandatory measures around power supply, electricity price, land use, taxation and environment protection to ensure existing bitcoin mining activities are phased out.
By mid-May, the notice had reached all cities and counties within Sichuan, some of which had issued corresponding documents and reported their work progress. On May 21, MuLi County released, issued a notice asking hydroelectricity generation enterprises in the county to immediately stop attracting investments around cryptocurrency mining, otherwise, they’ll suggest local law enforcement take mandatory measures such as sealing, fining or ordering to dismantle mining farms.
Notice from Muli County on banning crypto mining
Swaying policies: support – curtail – call for an orderly exit
Earlier this month, multiple local governments including Ya’an and Garze in Sichuan have shown their support for and encouraged crypto mining operations to help consume excessive hydroelectricity during the rainy season and make up for the economic losses caused by the coronavirus outbreak.
While the surge in electricity consumption for the prolonged high temperatures and delayed rains within the region have resulted in the energy-hungry bitcoin mining activities curtailed in some areas.
Policy remains on paper?
After all the swaying policies, the latest “crackdown” notice from the province’s financial regulator triggered another stir. Bitcoin miners there, however, seem to be undisturbed at the moment, saying that authorities are striking a stringent pose again as some companies are making use of authorities’ policies to carry out exaggerated publicity to grab investors’ attention.
Of course there is no guarantee that the order from the local authority will work, local power suppliers may continue to fuel bitcoin mining businesses under the table to get a slice of the lucrative action.
And the fact is that the order is difficult to be followed through. Since bitcoin mining operations are usually running under the name of big data or cloud computing, it is difficult for low-level administrations to differentiate it from other supported high-tech businesses, and most of them would like to turn a blind eye to bitcoin mining activities within their region as the mining operations could bring economic benefits for locals.