The authorities hope to dismantle 57 established mining companies and another 7 that are under development.
According to some public reports, two of the provinces with the highest volume of bitcoin mining in China, this is, Yunnan, and Sichuan, have begun to make efforts to dismantle more than 57 mining companies that operate in their territories.
Reports from the local media Wu Blockchain, the government entities of the aforementioned provinces have decided to dismantle the companies that mine cryptocurrencies in their region. In particular, the Yunnan province decides to dismantle these companies. This province, through the Dehong Dai and Jingpo Autonomous Prefecture, convened a meeting, last May, to determine the necessary methodology to conduct the cleaning in the sector.
The results of the meeting determined that it is necessary to dismantle up to 57 companies that were in charge of conducting data mining, as well as 7 other projects that were in the process of being assembled.
Although the authorities evaluated the positive factors of these companies, such as using residual energy from hydroelectric plants, the truth is that these companies, according to Yunnan, also represent a significant security risk that could affect the region’s power plant. Furthermore, local authorities also emphasized that these companies, called “big data” projects, abuse the concessions granted to operate, especially in actions to evade taxes.
Sichuan is one of the provinces with the highest volume of bitcoin mining in the world. But currently, Yunnan, the neighboring city, has an energy consumption that reached half of Sichuan. Although Yunnan was much more backward than its neighbor, bitcoin mining has thrived on increased energy production thanks to investment in the sector. This, as well as the favorable climate and low population, has made Yunnan an ideal city for setting up mining companies.
According to some economic experts, the use of mining in Yunnan could help boost other sectors of the economy that were paralyzed in growth. Just as Sichuan established some years ago, where these companies took advantage of the energy that the power plants produced.
Although the local authorities can regulate these companies in a better way, the Yunnan State Network published a report, last April, where it asks that all these cryptocurrency mining projects should be dismantled. Besides, the Yunnan State Network indicated that they must take into consideration the amount of energy consumed illegally.
Yunnan and Sichuan Do Not Ban Mining but Increase Controls
The Sichuan and Yunnan provinces are particularly beneficial for the development of cryptocurrency mining by the establishment of hydroelectric power plants. These local energy sources compete directly with other sectors of national energy production, which makes the use of these energies cheaper and more consumption.
Although the use of these energies in mining is beneficial for both the data company and the local hydroelectric power station, it could directly affect the national energy generators. It is also uncomfortable for the heads of government, who, although they can obtain an economic benefit from this activity, are undecided about allowing mining or not.
By María Rodríguez
