Confusion Grows Surrounding Official Chinese Position Regarding Bitcoin Mining
In recent days a number of conflicting reports have surfaced pertaining to the stance of China's government with regards to bitcoin mining. Last week, Bloomberg reported that the People's Bank of China (PBOC) had met to discuss curbing mining operations in China, whilst Chinese media reports denied such – however, it has since emerged that the local government of Xinjiang province has mandated an “orderly exit” of its bitcoin mining industry. Despite widespread speculation that the long-feared Chinese crackdown on cryptocurrency mining may have begun, the establishment of international facilities on the part of leading mining pools has led to analysts predicting that much of the bitcoin mining industry will be able to weather a Chinese regulatory crackdown.
PBOC to Limit Power Consumption of Bitcoin Mining Industry
In November, a document surfaced suggesting that a state-owned power company in Sichuan would seek to crack down on bitcoin mining, however, the company stated that the letter had been misconstrued due to translation errors, and that such pertained to 'fail[ure]s' of 'small hydropower stations' to 'give priority to' the local' electricity demand.' Later that month, news.Bitcoin.com met with the manager of a bitcoin mining farm in Sichuan, whose comments further suggested that local power companies may be operating beyond the directives of the central government.
'When we first met people at the hydropower station, we told them we were a cloud computing company, but the manager of the hydropower station laughed at us and said 'Bullshit, I know you people came here to mine bitcoin. Just tell us what can we get'. As to local government, we don't have to meet with any officials, the station will help coordinate. And who can get the right to set a mining factory' The rule is very simple: first come, first served.'
Chinese State Media Denies Allegations of Mining Crackdown
The article, however, asserted the Chinese state will 'no longer give any mining incentives, including taxes, electricity, land, etc' – apparently confirming, at the very least, that the central government will seek to tighten control over the distribution of electricity within provinces at a local level.
Xinjiang Province Mandates “Orderly Exit” of Cryptocurrency Miners
A separate document originating from the Financial Market of the PBOC states that 'Local governments shall coordinate with multiple departments to take actions concerning electricity price, land use, tax and environmental protection in an effort to guide miners orderly exit.” Although the extent to which the policy of Xinjiang Province will be replicated in other jurisdictions, many are speculating that a Chinese mining crackdown may be currently underway.
Leading Mining Operations Relocate to Establish Operations Overseas
In October of last year, reports indicated that Bitmain would be opening a regional headquarters in Singapore, following its establishment of operations in the United States and Canada. Other leading mining companies reported to have set-up operations abroad include the third largest mining pool, Btc.top, expected to establish operations in Canada, and the fourth largest mining pool, Viabtc, which now operates facilities in Iceland and The United States.
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