Cryptocurrencies seem to be in a state of uncertainty in China while a major local authority is currently taking action against mining. It was reported that the Sichuan province’s financial regulator in the country has banned cryptocurrency mining in the region.
On May 22, PA News confirmed this new development on Twitter:
“The Financial Administrative of the #Sichuan providence of #China has issued a notice to its subordinate offices ordering them to “guide mining entities to end their mining activities in an orderly manner”. The province accounts for about 9.66% of the global #mining power.”
Despite the abundant hydroelectric power in the region which has been favorable to cryptocurrency mining, the authority has decided to start with it. The order says hydroelectric plants should stop investing in all existing cryptocurrency projects immediately and they should stop the addition of new mining projects.
Failure to abide by the order will lead to an investigation of illicit construction projects, as well as bans, fines, self-demolition, and other administrative measures. This poses a remarkable challenge to mining since the activity is greatly reliant on hydroelectric power in the region. This could signal a possible general withdrawal from cryptocurrency mining in China, as the province has always been a hotspot for mining in China.
In April, a Bitcoin Mining Map was launched to track the average monthly hash rate produced by every country across the world. ViaBTC, Poolin, and BTC.com are the major sources of information for the map. According to the map, 65.08% of international hashpower is from China, and the Sichuan province accounts for 9.66% of hashpower in China (6% of the international hashpower), while the Xinjiang region accounts for 37% of the international hashpower.
This move could also be pointing to a potential outlawing of cryptocurrency mining in China and it could be a great challenge for cryptocurrency mining worldwide, since the country accounts for 65% of the world’s hashpower.