China’s Qinghai Province Shuts Down Crypto Mines
Bitcoin mines in China use a combination of coal and hydroelectric energy.
Source: Shutterstock
key takeaways
- China’s Qinghai province has issued a new ban on cryptocurrency mining operations, the government announced Wednesday
- The local government cited concerns over energy usage associated with crypto mining
China’s Qinghai province has issued a new ban on cryptocurrency mining operations, according to a government document released Wednesday.
“The Qinghai government will prohibit any local authorities from setting up or permitting any new crypto mining projects. It will also close down all the current crypto mining operations in the province,” the document from the Qinghai Industry and Information Technology Department said.
The local government cited concerns over energy usage associated with crypto mining. Bitcoin mines in China use a combination of coal and hydroelectric energy. The use of coal specifically does not align with China’s broader goal of moving toward a more carbon neutral nation.
“China’s move is not surprising given its history of crypto repudiation,” said Haohan Xu, CEO of Apifiny. “The news also reflects the recent expansion of mining to other countries like the United States, Russia, Kazakhstan and Malaysia — and the increased throughput of existing miners outside of China. Some trading platforms are even starting to mine Bitcoin to help increase liquidity for their traders and exchange partners.”
One of the major governing bodies in China, the State Council of China, put crypto miners on notice in May when it directed local governments to restrict crypto-related activities, including mining and trading.
China has recently been taking steps to protect businesses from inflation. Because the country is the largest manufacturer and exporter in the world, by far, price hikes in China are felt globally.
Officials have promised to crack down on hoarding and price gouging and have urged coal and steel producers to keep prices where they are.
A similar ban on mining is in place in Iran where President Hassan Rouhani said “The mining of cryptocurrencies is strictly prohibited until the end of summer, and the Ministries of Communication and Information Technology and Energy are responsible for cutting off power to these centres.” The ban will last until September due to hot weather months.
