Chinese Bitcoin Mining Enterprises Face Ban Due to Local Regulators Notice
Most of the world’s Bitcoin mining power is found in China, a country which has been a leader in the industry for several years. China is the source of just over 70% of Bitcoin’s hash rate.
Cheap hydroelectric power in some parts of the county makes it one of the best countries to set to a Bitcoin mining enterprise. However, incoming policies may be a threat to Bitcoin miners in China.
Inner Mongolia moves to Ban Bitcoin Mining
Inner Mongolia, an autonomous region in China, is reportedly moving towards banning Bitcoin mining within its jurisdiction.
ChainNews, a crypto news outlet, reports that authorities in Inner Mongolia have decided to end all Bitcoin mining activity. The ban will also affect any businesses that make use of high computing power, or that have large data centers such as providers of cloud computing services.
Authorities in Inner Mongolia have described Bitcoin mining as a pseudo financial innovation, which does not make any contributions to the overall economy of the region. Many government departments in the autonomous region will be involved in the efforts to put an end to Bitcoin mining.
The Big Data Bureau, the Department of Industry and Information Technology, the Public Security Department, the Financial Office, and the Development and Reform Commission, will all be contributing towards ensuring that the ban takes effect.
Effect on Bitcoin Mining Industry
Inner Mongolia holds a significant amount of the mining power that comes from China. The move by the territory’s authorities to ban Bitcoin mining could have a serious effect on the Bitcoin industry as a whole. The mining power dedicated to Bitcoin could decrease and this would affect the leading crypto asset’s performance on the markets.
The ban by Inner Mongolia’s authorities could be the first move in a broader ban on Bitcoin mining in China. The country’s government has mulled over a possible ban, but those plans were set aside.
Inner Mongolia could set a precedent that could be followed by other Chinese provinces, and this places the Bitcoin mining industry in the country in a difficult position. With the Chinese government looking to launch its own digital currency, a future ban on crypto related activity in the country cannot be ruled out.
A recent proposal by the Chinese Economic Planning Commission referred to Bitcoin mining as dangerous, a language that could be a reflection of a growing negative perception towards the cryptocurrency on the Chinese government’s part.
Crypto traders in the country will be keeping a close eye on developments around crypto related policy over the next few months.