Local Chinese Authorities Are Cracking Down ‘Irrelevant’ Crypto Mining Companies
- Chinese local authorities target “irrelevant” cryptocurrency mining firms in Inner Mongolia.
- Mining firms should have a “real impact on the economy”.
- China’s lukewarm state in the blockchain.
In a published post on the Global Times, a Chinese daily, the Chinese local authorities in Inner Mongolia, North China’s Autonomous state, will begin a crackdown on local crypto mining firms in a bid to tighten management across the industry. A notice issued by the Department of Industry and Information Technology in the region said the authorities are looking to streamline the industry by pushing out irrelevant crypto mining firms.
The crackdown begins barely a month since the Chinese premier, Xi, gave a speech on embracing blockchain in the country. With cryptocurrency mining firms cropping up in the region given the cheap electricity offered by the government, authorities are looking to shift the businesses towards more blockchain-related products.
‘Mining Firms Should have Real Impact’
The notice further specified that it wants to crack down on crypto mining firms that specifically do not have a real impact in the economy. China’s government has for a long time worked on regulating the digital currency market and the current steps work towards a totally regulated industry.
The local government of Kangding in Southwest China's Sichuan Province, for example, formed workgroups to inspect and regulate local bitcoin mines in late May, according to media reports.
A Lukewarm State in Regulation
The crackdown on mining firms in Inner Mongolia raises ambiguousness in China’s overall stance in digital asset regulation. Since banning cryptocurrency ICOs leading to mass closure of crypto exchanges in the country in 2017, the crypto industry has been a wild ride.
In recent weeks the National Development and Reform Commission followed Xi’s green speech on the blockchain by lifting bitcoin mining from a list it drafted in April that listed industries it wanted to eliminate. Now they are cracking down miners?