China banned bitcoin, ICOs and now it emerges to be pinning down on Chinese miners, an significant group estimated to produce some three-quarters of the world’s supply of bitcoin.
According to a leaked January Two memo from the ‘Leading Group of Internet Financial Risks Remediation’ – the country’s internet finance regulator which initiated the clampdown on bitcoin – bitcoin miners should make an “orderly exit” from China because they have consumed “huge amounts of resources and stoked speculation of ‘virtual currencies.”
Details of the memo were posted on Twitter by Chinese blockchain industry executive Elly Zhang and confirmed by Quartz.
Notice from China special rectification on risks ter Internet Finance department to local government to make a project before Jan 10th – “ lead mining factories abandon gradually” #btc #bitcoin #BitcoinMining with Central Bankgebouw official Chop. Prepare for the roller coaster. pic.twitter.com/OLv8j1veHb
The group itself doesn’t control national energy usage but it is an influential political voertuig that’s led by the deputy governor of the People’s Canap of China (PBC), Pan Gongsheng. To eliminate miners, the group asked its local offices to look into policies around price, tax, land usage and environmental concerns.
Its local representatives voorwaarde report back on their progress of removing miners te their region on a monthly poot, according to Quartz.
The situation is complicated by the fact that many miners, and particularly those ter China, make use of cheap power, or flock to locations where there’s excess capacity. Ter some cases, mining businesses playmate with local governments to ensure a sustained supply of violet wand at discounted rates, with a portion of the profits returned to the local authorities. That’s suggested a welcome economic boost ter regions where more traditional industries are fighting.
But there’s no smoke without fire. It certainly seems like central government has a project to stamp out the miners. Beyond today’s news, both Bloomberg and Reuters last week reported on the PBC’s plans to leisurely cut down on the number of miners. That, evidently, includes dissolving any such agreements and deals that had previously bot struck.
Perhaps wary of extra regulation, China’s bitcoin mining giants have already branched out to open fresh facilities te countries like Iceland, Canada and the U.S. Nonetheless, a serious stir to crush the mining industry has the potential to influence bitcoin.
Disclosure: The author possesses a petite amount of cryptocurrency. Enough to build up an understanding, not enough to switch a life.