Inner Mongolia’s government is taking some serious steps by regulating the crypto mining operations within the region. The Inner Mongolia Autonomous Region has issued a notice requesting a clean up of Bitcoin mining operations within the region.
The five departments involved in this cleaning up procedure are- the Development and Reform Commission, the Public Security Department, the Financial Office, the Big Data Bureau, and the Department of Industry and Information Technology.
The three Bitcoin bases in China, Inner Mongolia, Xinjiang, and Sichuan produce almost 60% of the global hashrate. The mining is done in Inner Mongolia, and Xinjiang is done with the help of the electricity generated by non-renewable resources, whereas Sichuan is using their abundant hydropower for Bitcoin mining.
In 2017, Sichuan generated 90% of its electricity with the help of renewable energy while Xinjiang and Inner Mongolia generated 23% and 16% respectively. This surge in the power consumption led to various illegal mining operations getting banned in Xinjiang and Sichuan.
This time regulators have taken things very seriously in Inner Mongolia as they have started an investigation on cryptocurrency mining operations along with businesses that use the titles of cloud computing, big data, IDC’s. If these orders are followed strictly, then the cost for bitcoin mining in China will increase, and the Bitcoin hashrate will get influenced in the upcoming dry season.
China turning cold towards Bitcoin
This is one of the reasons why several Bitcoin mining farms in China are moving abroad. Many people have proposed the usage of clean energy such as hydropower in Southwestern China and wind or solar energy in the northwest region for electricity for Bitcoin mining. But these proposals were rejected due to the unamicable attitude of the regulators towards the cryptocurrencies.
China has decided to take harsh steps against cryptocurrency exchanges and bitcoin mining operations with the help of regulators. China’s central bank’s initiative of cryptocurrency crackdown was considered a complete success as data showed that less than 1% of the Chinese currency was involved in all Bitcoin trades worldwide. The government took these recent changes and harsh decisions at the time when PBoC is ready to roll out its digital currency. This series of events against Bitcoin and crypto exchanges might bring a sudden price drop in the cryptocurrency market as well as in BTC price.