Photo Credit: Bloomberg
Anhui, in eastern China, has become the latest province to announce a sweeping ban on cryptocurrency mining, saying the move will help ease an acute power shortage over the next three years.
Anhui will shut down all cryptocurrency mining projects in a cleanup aimed at reducing power consumption, as the province faces a "grave" supply shortage of electricity, according a news portal operated by state-owned Hefei Media Group.
China's state council, or cabinet, vowed to crack down on Bitcoin mining and trading in late May, citing underlying financial risks. Bitcoin price in India stood at Rs. 23.8 lakhs as of 1:30pm IST on July 14.
Major Chinese mining hubs including Sichuan, Inner Mongolia, and Xinjiang have all issued detailed measures since to root out the business. Before the clamp-down, China accounted for roughly 70 percent of global Bitcoin production.
Anhui is not a big cryptomining province, but the latest edict underscores an ongoing squeeze on Chinese miners.
Some are now shutting down or looking to move out, seeking tolerant authorities, low temperatures lest machines overheat and cheap electricity - ideally surplus power from hydro plants or oil fields that would be wasted.
In the power-hungry cryptocurrency mining business, miners use specially-designed, high-power computers, or rigs, to solve complex math puzzles in a process that create new virtual currencies such as bitcoin.
Anhui's electricity demand will rise to 73.14 million kW in 2024, but current supply of the province is only 48.4 million kW, suggesting a "relatively big gap", according to the article.
In addition to rooting out cryptocurrency mining, Anhui will also promote reforms in electricity pricing to guide more economic use of power.
© Thomson Reuters 2021