Bitcoin Mining Clampdown in China Reaches Yunnan Province

14 June 2021 | Updated: 14 June 2021

Another province in China has taken a stand against Bitcoin mining operations in the region as the Chinese government intensifies efforts to wean the nation of cryptocurrency activities. Over the weekend, Yunnan provincial authorities disbursed a memo ordering an investigation into the illegal use of electricity by individuals and companies in Bitcoin mining.

The China Securities Journal, a local media house, reported that the provincial energy department has threatened to cut power transmission to those using electricity for crypto mining.

South China Morning Post (SCMP) reported that the provincial authorities could shut down any Bitcoin mining operations that may “pose a safety risk related to their electricity usage” by the end of June.

Yunnan, China’s fourth-largest province in terms of Bitcoin hashing power, has joined the growing list of Chinese regions clamping down on BTC mining activities. Some others that have clamped down on BTC mining include Mongolia, Xinjiang, and Qinghai.

Yunnan is also the second-largest producer of hydropower in China after Sichuan, and most of the mining in the region already uses renewable energy. Regardless, Beijing continues to wage war on cryptocurrency-related activities.

Bitcoin mining operations across China have slowly declined over the past few months. Inner Mongolia began evicting miners in February this year and had shut down 35 mining farms by the end of April.

Meanwhile, Qinghai authorities ordered BTC miners to close shop last week and have ordered businesses like data centers, industrial parks, and power stations to desist from providing crypto-related companies with resources.

China is Losing Bitcoin Mining Dominance

According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), China is still responsible for about 65% of the global hash rate. Xinjiang is the largest single provider of Bitcoin mining power and accounts for about 36% of the total global hash rate, followed by Sichuan and Inner Mongolia, respectively. Yunnan comes in number four position and accounts for 5.4% of the global hash rate according to the SCMP.

Another report from Miner Daily suggested that China’s hashrate dominance has dropped to 55%, as more mining companies migrate to North America, where renewable energy is plentiful.

That said, some analysts have noted that the fall of hash power in China due to the government’s anti-Bitcoin stance is, in fact, a good thing for the Bitcoin network.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.