Regulators in China’s Sichuan region have sent a notice to all cryptocurrency businesses within their jurisdiction to call for a swift end to all mining and mining-related activities. Municipal administrators and subordinate offices in Sichuan have also been directed to “guide” miners to shut down their operations “in an orderly manner.”
The mandate is particularly significant because of the sheer amount of Bitcoin hash power (computing power) that is generated from the regions–according to PANews, which covers the Asian blockchain industry, it’s estimated that 9.66 percent of the Bitcoin hash rate is generated in Sichuan.
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The Financial Administrative of the #Sichuan providence of #China has issued a notice to its subordinate offices ordering them to “guide mining entities to end their mining activities in an orderly manner”. The province accounts for about 9.66% of the global #mining power. pic.twitter.com/mVtihdf9px
— PANews (@PANewsOfficial) May 22, 2020
While a total shutdown of all mining operations in Sichuan will certainly change the global Bitcoin hash power landscape, the shift won’t necessarily bring in more mining power from outside of China: other regions in the country, including Xinjiang, Mongolia, and Yunnan, are also home to large percentages of the global Bitcoin hash power supply. Like Sichuan, these regions also have access to cheap electricity and inexpensive labor.
Sichuan’s anti-Bitcoin-mining ordinance was implemented on a regional level, so it won’t affect these other provinces. However, it’s unclear whether other provinces in China may eventually follow suit with ordinances of their own. After all, the federal Chinese government has taken a rather anti-cryptocurrency attitude.
Still, pro-blockchain policies and remarks by Chinese President Xi Jinping have paved the way for the blockchain industry in China to continue to grow. In fact, the National People’s Congress is currently in the process of reviewing a bill that would create a national blockchain fund.