The miners have until June 25 to stop their activities. A similar action happened in Inner Mongolia, Xinjiang, Qinghai, and Yunnan.
The Chinese authorities keep on forcing the closure of Bitcoin mining farms. This time the authorities took down 26 mining farms located in Sichuan, a southwestern province of China.
The National Development and Reform Commission (NDRC) and the Sichuan Office of Energy notified the miners that they have until June 25 to cease their operations and requested the power generation companies to stop providing their services to the mining companies, according to a local media outlet.
With this new measure on board, the authorities would force the migration out of China of a significant percentage of the Bitcoin hash rate. According to a study by the University of Cambridge, in 2020 the nation held first place in the ranking of the hash rate with 65%.
In the case of Sichuan, it is the second province in the Asian nation that contributed the highest hash rate, with 9%, according to the Cambridge report. Now, added to the other regions affected by Chinese regulation, it could be losing 57% in the hash rate.
The Sichuan region is famous for offering advantages in the area of hydroelectric energy, something that Bitcoin mining companies have been taking as a benefit.
Chinese journalist Colin Wu said that hydroelectric power in Sichuan is “abandoned” in summer and if it is not used for mining it would be wasted.
According to Twitter user @bigmagicdao, people will “witness history” in bitcoin mining when all mining farms close. It can already be seen how China’s action negatively impacts the hash rate.
China’s attempts to censor bitcoin were a topic set for discussion by the finance committee of that Asian nation. They consider Bitcoin mining as a key sector that must be watched to prevent and control every financial risk posed by the cryptocurrency, according to a government report published on May 21.
Regulatory Measures in other Chinese Regions
Regulatory entities have recently attacked bitcoin mining in four other regions of the Asian nation, specifically Inner Mongolia, Xinjiang, Qinghai, and Yunnan.
In the case of Inner Mongolia, the authorities would revoke the licenses of telecommunications and information technology companies involved in mining Bitcoin and other cryptocurrencies.
Regarding Yunnan, the measures were similar to those of other provinces. This region ranks as the fourth largest in China in terms of hash rate, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI). Yunnan had a 7% global hash rate from September 2019 to April 2020, Behind Yunnan, comes Inner Mongolia, Sichuan, and Xinjiang.
Bitcoin is now in the Underground
Last May, China forbade financial institutions and payment companies from providing services related to cryptocurrency transactions.
For this reason, the clandestine use of over-the-counter cryptocurrency platforms has increased their activities since exchanges were banned in 2017. Although it is unknown what these platforms are. The Chinese government considers crypto assets to be a risk because they are not being supported by a real value, and because of their unpredictable volatility in the market.
By: Jenson Nuñez
