As reported by a member of the Chinese crypto industry, Colin Wu, the city of Baoshan in the southern Chinese province of Yunnan was prohibited from supplying electricity to the miners of Bitcoin. Any station connected to the network that does not interrupt the supply of electricity will be considered as acting illegally.
Wu added that Yunnan is the third-largest location for Bitcoin mining in China after Sichuan and Xinjiang.
In April last year, at the level of the Chinese government, the idea to forbid the mining of Bitcoin was expressed “because of its unpleasant effects on environment”. However, back then, this sector did not fall into the list of sectors that must be eliminated for environmental reasons.
In the August of this year, the autonomous region of Inner Mongolia, which is also a major mining center, has removed the subsidized tariffs for power supply.
China’s phased abandonment of the mining industry can lead to huge shifts in the entire cryptocurrency market, taking into account that the country controls more than 65% of the total Bitcoin network hash rate.
Regardless of its leadership, the existing limitations make it difficult for miners to work on the territory of the country. Earlier Wu has stated that it is getting increasingly harder for crypto miners in China to pay bills for electricity since banks freeze their accounts on various legal grounds.
At the same time, according to Wu, the ban in Yunnan should not be considered as a guide to a broad regulatory environment for the industry. Moreover, he believes that this step is economically justified:
“There is no need to overestimate the impact of this incident. The behavior of local authorities and energy companies in China towards mining cryptocurrencies often changes. To a great extent, it is dictated by economic motives, rather than political pressure.”
