Local Chinese government seeks to 'ban' crypto mining activities, sources say it doesn't mean much
May 22, 2020, 5:10AM EDT
1 min read
Local government authorities in China’s Sichuan province have issued a notice, seeking to “ban” crypto mining activities in the region.
The notice, issued by the financial administrator of Sichuan to its subordinate offices, reads that “hydroelectric power generation enterprises in our county shall immediately stop the investment of virtual currency ‘mining’ activities and shall not add new virtual currency ‘mining’ projects.”
“Otherwise, our bureau will recommend the county people's government to investigate and deal with illegal construction projects, take bans, fines, order self-demolition and other administrative measures until it is handed over to the people's court for compulsory enforcement,” the notice added.
It remains unclear whether Sichuan, the second most popular region in China for crypto mining activities with around 10% of bitcoin hashrate share, will indeed be banned from the business.
Sources with knowledge of the matter told The Block that the order might not be enforced, and everything will continue to run normally. However, crypto mining farms in Sichuan may lose subsidies for cheaper electricity.
The notice comes at a time when the hydro season in China, particularly in Sichuan, is approaching fast. The season, which sees heavy rains and cheaper hydroelectricity, is beginning next week and will run through October.
The hydro season is expected to push up bitcoin's hashrate, which has declined post halving. It remains to be seen whether the notice impacts crypto mining activities in Sichuan in any way.