Escalated efforts in 2021 towards the clampdown on cryptocurrencies are returning impressive results for the Chinese government. Some key milestones have been achieved with results that are evident based on results from the country.

One of the latest achievements towards the elimination of cryptocurrency activities in the country is the 2 billion KWh that is claimed to have been recovered from the grid by the Yunnan province. According to the Yunnan Energy Administration, by enforcing the ban on cryptocurrencies, especially in the area of Bitcoin mining, there was a resolute dismantling of virtual currency mining machines in the province, thereby disconnecting them from the grid and recovering the power consumed by them.

To achieve this level of power recovery, the Yunnan Energy Administration organized the municipal electric power administrative departments and power grid companies. All of them were mobilized to carry out a special joint law enforcement exercise. Apart from recognized virtual currency mining stations, other setups identified to be supplying energy towards the same or similar goals that are related to Bitcoin and cryptocurrency processes were also clamped down. They include workshops and various power supply facilities.

An audit of the exercise as reported by the Yunnan Energy Administration claims that as of the end of September 2021, three rounds of energy clean-up and rectification had been carried out. During the clean-up exercises, 246 small and medium-sized hydropower stations were found to secretly supply power to Bitcoin mining firms.

As of the time of writing, the power supply to the platforms has been suspended following relevant national requirements, according to the agency. Also, as stated earlier, most of the workshops and mining machines have as well been dismantled. 

Preliminary calculations, as reported by the agency, notes that about 2 billion kilowatt-hours of electricity was saved throughout the year as a result of this exercise. This is a major achievement for the province of Yunnan, and the Chinese company as a whole. The whole goal is to eliminate all Bitcoin and cryptocurrency activities, especially Bitcoin mining as soon as possible. Multiple reasons have been given for this clampdown, most of which revolve around the sanitization of the country’s financial sector, and the pursuit of carbon neutrality by China.

Although the clampdown became much more serious this year, efforts by the Chinese government towards this goal have been coming for a long time. In 2018, the People’s Bank of China (PBoC) outlined plans to curb power supply to some Bitcoin miners. According to reports, the bank was alleged to be embarking on a systematic crackdown, where local governments were instructed to regulate the power usage of Bitcoin miners. This was targeted at forcing them to gradually reduce their scale of production. 

Incidentally, what began as a gradual process has become a full-blown clampdown without reservation of any kind. Also, targeting electricity supply is simply a method of cracking down on the system from the root. This is due to how important electricity is to the Bitcoin network which is sustained by computers across the globe that are constantly solving complicated mathematical algorithms to confirm transactions and secure the network.

This report from the province of Yunnan is one of many achievements by the Chinese government so far in its fight against Bitcoin and cryptocurrencies. The crackdown is not over, as the government has insisted on following through with its goals until total elimination is achieved.