China’s State Media Promotes Bitcoin Miners Going Green in Country & Points to Wasted Energy
Ahead of the politically sensitive 100th anniversary of the ruling Communist Party on July 1, the country is also trying to cool down speculation in other asset classes just like crypto.
China has been increasing its efforts to crack down on crypto mining and trading since last month, which helped push the price of Bitcoin down.
However, as we reported, the strict measures have been particularly taken ahead of the politically sensitive 100th anniversary of the ruling party on July 1 and are not limited to the crypto sector.
These measures extend to banks, education, and the internet. SpartanBlack, of crypto fund The Spartan Group said,
“China’s crackdown on crypto wasn’t specific to crypto only…they are trying to cool down speculation in multiple asset classes.”
This week, China stepped up its campaign to rein in commodity prices and reduce speculation. State-owned enterprises were ordered to limit their exposure to overseas commodities markets by the State-owned Assets Supervision and Administration Commission.
Also, the National Food and Strategic Reserves Administration will soon release state stockpiles of metals, including copper, aluminum, and zinc, and will be sold in batches to fabricators and manufacturers. This resulted in most metal prices in Shanghai falling along with shares of metal companies in China and Hong Kong. Jia Zheng, a commodity trader with Shanghai Dongwu Jiuying Investment Management Co. said,
“We haven’t seen the country release state reserves for years.”
“This will boost short-term supply, sending a bearish signal to the market.”
Meanwhile, the scrutiny on overseas commodities positions is aimed at “curbing excessive speculation as prices are overheated and could bring risks to SOEs,” said Jia.
Earlier this month, the Chinese top financial regulator also instructed major creditors of China Evergrande Group, including Industrial & Commercial Bank of China Ltd., to conduct a fresh round of stress tests on their exposure to the world’s most indebted developer.
Meanwhile, some of China’s largest stock software has stopped providing BTC market data in response to regulatory requirements in the cryptocurrency space.
Moreover, when using an iPhone to log in to some cryptocurrency apps in China, a police prompt appears reading: “You are visiting an overseas niche website, please browse with caution.” However, one can log in normally after closing the prompt, noted local media publication Wu Blockchain.
While the regulators are curbing crypto mining in several provinces, Chinese state media-owned CGTN is now promoting Chinese Bitcoin miners going green amidst the pressure. Arthur Lee, CEO of SAI, a bitcoin, and computing company, told CGTN,
“Bitcoin miners thrive in the country because of the cheap electricity, easy availability of land, affordable labor, and safety. But things have changed for us in recent years because of the recent regulatory changes.”
Lee further shared that they are collaborating with power generation companies to use the excess energy generation to mine Bitcoin and prevent energy wastage. “The cheapest energy is where the energy is idle,” he said.
The publication then goes on to note that around 17.1% of total wind-generated power went to waste as of 2017, and in 2019, China wasted 2.7%, or 1.24 billion kilowatt-hours (kWh) of solar power, and 4% or 4.35 billion kWh, of wind energy, according to the country's National Energy Administration (NEA).
“China's State Grid had set a goal for the new energy utilization rate at above 94 percent for 2020.”
“We should not forget that bitcoin mining generated huge tax revenue and created job opportunities, helping country's fight against poverty,” said Liu Changyong, professor at Blockchain Economic Research Institute. He added,
“There is a risk of losing a sector that was nurtured from 2013 to 2017. Policymakers, power companies, and bitcoin miners should come together to resolve the issue.”
Such steps would be a “win-win deal for everyone.”