The manager believes that it will take a long time for Chinese regulators to recognize mining. The ASIC miner manufacturer is accelerating its expansion plans to other countries.
Zhang Nangeng, CEO of Canaan, one of the largest manufacturers of ASIC miners for Bitcoin, believes that China is not doing the right thing by prohibiting cryptocurrency mining without taking into account that a considerable percentage of the industry is currently using clean and renewable energy.
In a virtual conference Nangeng said that if cryptocurrency mining that consumes fossil fuels affects the environmental policy of the Chinese government, it is not entirely clear why the government still wants to punish miners based on “clean energy”, according to Reuters.
China’s State Council spoke on May 21 about strict measures that will take place against cryptocurrency mining and trading. Four days later, the Inner Mongolia region posted the proposal for a regulation to prohibit the mining of cryptocurrencies.
Canaan’s CEO said that an indiscriminate prohibition campaign on Bitcoin mining does not take into consideration the potential economic advantages that could come from adopting clean energy. Therefore, he disagreed with the measures to punish the mining industry that generates jobs in regions with a fragile development and helps to balance the local government budget.
Cryptocurrencies Represent a Good Alternative
Nangeng claimed that cryptocurrency mining represents a big alternative when it comes to the excessive supply of electricity in certain regions of the country. The miners prefer to settle in areas that offer electricity at lower cost, a sign that they have an excess supply and a possible waste of energy.
The announcements of the regulators are creating an uncertain atmosphere in the sector, so many local miners have chosen to emigrate and settle in other countries where they can operate with fewer obstacles, the note adds.
The warning regarding repressive measures approaching extends concerns to the point that some miners have been quick to “undersell” their equipment, even up to 30% below the current market price, the executive clarified.
Bitcoin Mining Is Looking to New Places
Canaan’s CEO was less than optimistic about how regulators could show more flexibility with clean energy-based Bitcoin mining. Regarding this matter, he pointed out that, just as it took a long time for bitcoin to be famous in the market, there will also be a long process for bitcoin and cryptocurrency mining to receive the approval of Chinese regulators.
The executive also said that the company is accelerating its expansion plans abroad, consolidating long-term contracts, and setting up its own bitcoin mining business in other countries. As part of these plans, there is the creation of a new office in Singapore and preparing the completion of a mining farm in Kazakhstan, in Central Asia.
Looking abroad will not be a struggle for Canaan, which during the first quarter of the year generated at least 78% of its sales outside of China. During that period, it sold 122.2% more computing power than during the same period last year.
China has decided to forbid Bitcoin mining because it considers that it is attentive to its zero greenhouse gas emission plans, a study by the University of Cambridge, published last year, concluded that 76% of miners use renewable sources as part of their energy mix.
By: Jenson Nuñez