China Crypto Roundup (May 26–June 1): Yunnan Pressures Bitcoin Mining, Hainan Speeds up Blockchain Development, Tencent to Invest 500mln in Blockchain-like Techs
The Chinese cryptocurrency sphere this past week has seen Yunnan province, following its neighbor Sichuan, pressure cryptocurrency mining business.
While in the blockchain sector, the past week has seen intensive efforts made from the local governments: the country’s crypto island Hainan draws up a comprehensive plan for blockchain development; Chinese coastal city Ningbo sets up a 3-year plan to boost blockchain development. Private enterprises continue their relentless efforts in their blockchain deployment, with internet giant Tencent announcing a 500 billion yuan investment into trending technologies including blockchain.
Yunnan starts to pressure bitcoin mining business
Yunnan, one of the key cryptocurrency mining areas like its neighbor Sichuan (the alleged “world’s bitcoin mining capital” accounting for over half of the global bitcoin hashrate), has reportedly started pressuring bitcoin mining businesses operating in the region.
In hydropower-abundant Sichuan and Yunnan, most mining farms get cheaper electricity rates by directly from hydropower plants rather than from local or national grids. Such practice is carried out in a legal gray zone but makes perfect business sense for both sides.
However, it encroached on the interests of the local/national grids as well as local governments. And that may explain why local governments are always seeming to be ambivalent towards the bitcoin mining industry which, though, could help consume excessive hydropower and bring economic benefits in those regions.
The local government of Dehong, a prefecture in Yunnan, has demanded to dismantle 64 mining facilities that have been built without obtaining approval from authorities, just like Sichuan’s cleanup of illegal bitcoin mining operations along the Dadu River last May. A recent explosion in a hydropower station in Yunnan which caused 6 deaths and 5 other injured has also triggered a province-wide effort in security inspection. There will be more serious inspections on security issues and possible restrictions on local miners.
Hainan speed up blockchain development
On May 25, Hainan, establishing itself as the country’s “crypto island” for its innovative and friendly stance towards cryptocurrencies and blockchain, published a policy to accelerate the development of the blockchain industry.
The document draws up a comprehensive plan with 10 steps included: 1) establish a blockchain joint innovation platform; 2) create blockchain industry funds; 3) support blockchain infrastructure (i.e. blockchain companies); 4) use blockchain for tourism consumption points 5) use blockchain to reform digital government affairs; 6) encourage R&D of blockchain core techs; 7) build blockchain application demonstrations; 8) host blockchain conferences; 9) explore blockchain regulatory sandbox; 10) create industrial clusters.
Following President Xi Jinping’s call for greater blockchain development in October 2019, as well as the National Development and Reform Commission’s (NDRC) inclusion of blockchain within the remit of “new infrastructure” on 21 April 2020, local governments at multi levels have sped up their efforts in blockchain this year.
Another Chinese city Ningbo is also eye-catching in recent blockchain deployment. The busy coastal city on May 27 announced a 3-year plan to boost blockchain development. By 2022, the city aims to build one or two nationally renowned blockchain industrial parks and introduce in more than 100 blockchain companies which include 2-3 leading blockchain companies; as for efforts in the technology R&D and talents cultivation, Ningbo plans to set up more than 5 blockchain labs and R&D centers, at least 1 blockchain academy… With all the plans and efforts, the city wants to be a leading blockchain center in China by the year of 2025.
Tencent announced 500mln investment in hi-tech including blockchain
Apart from governments, private companies are not willing to let the blockchain opportunity go. Chinese Internet giant Tencent recently announced to invest 500 billion yuan ($70 billion) over the next five years in new digital infrastructure, a major hi-tech initiative that would bolster Beijing’s efforts to drive economic recovery post-coronavirus.
The massive investment will focus on fields including cloud computing, artificial intelligence, blockchain technology and Internet of Things, as well as advanced servers, supercomputers, data centers and 5G mobile networks.