Sichuan Energy Regulators Set to Meet in June to Discuss Bitcoin Mining
The latest nationwide crackdown on cryptocurrency mining in China has raised questions about the sustainability of Bitcoin’s current hash rate and has sparked a global market downturn. With rumors circulating that China’s central government plans on outlawing Bitcoin mining in Sichuan, Xinjiang, and other northern provinces, many have blamed the industry’s huge energy consumption for the latest change in sentiment.
However, the latest news coming out of Sichuan, China’s province with the largest concentration of Bitcoin mining farms in the world, points to a much more optimistic outcome. According to the Global Times, a Chinese state-backed online publication, the Sichuan Energy Regulatory Office announced that it will hold a meeting at the beginning of June. The goal of the meeting, scheduled for June 2nd, is to better understand the current situation of cryptocurrency mining activities in the southwestern provinces. The meeting was reportedly required by the National Energy Administration, which oversees all provincial regulators focused on energy, including the Sichuan Energy Regulatory Office. The National Energy Administration runs under the National Development and Reform Commission (NDRC) and, as such, answers directly to the central government.
Colin Wu, a regional reporter posting on the Wu Blockchain Twitter channel, noted that the meeting will analyze the impact shutting down mining will have on the consumption of wastewater in the province. Sichuan is the country’s largest producer of hydropower thanks to its natural geography and abundant rivers. Optimal conditions have made hydropower harnessed in Sichuan one of the cheapest energy sources in the world, making it especially attractive to miners looking to increase profits.
Despite receiving funding as a renewable energy source, hydropower plants in Sichuan still aren’t connected to the larger provincial grid. Large industrial complexes make up the majority of Sichuan’s hydropower consumers. With the rainy season set to begin in the summer, local authorities are worried that shutting down large mining operations might decrease the demand for hydropower altogether and cause large amounts of excess wastewater to accumulate.
And while it’s highly unlikely that any solid regulation regarding mining would be published before the June 2nd meeting, some miners have already started to pack up and move their operations elsewhere. Mclouds, a one-stop physical mining computing service platform, said that it would transfer a portion of its mining machines to Kazakhstan. Sources from Mclouds also revealed that a significant number of miners have already begun their moves out of China, with North America being a popular choice.
With less than a week to go before the meeting takes place, it’s not just miners in China that have been bracing for impact. Other companies in the crypto industry have also begun taking steps to distance themselves from Chinese customers, expecting increased regulatory scrutiny from the People’s Bank of China (PBoC). Huobi China confirmed to the Global Times on Monday that it has already suspended services to customers based in mainland China and is looking into implementing a solution for customers that already own bitcoin miners.