Authorities in China‘s northwestern province of Qinghai and neighboring Xinjiang ordered an end to cryptocurrency mining-related projects this week after Beijing increased restrictions on Bitcoin mining and transactions.
After the Chinese State Council’s Financial Stability and Development Committee’s decision to restrict Bitcoin mining and trading last month, some miners are considering moving elsewhere.
“We stand at a turning point for the mining industry in Asia,” said Lei Tong, Managing Director of Babel Finance Financial Services, a crypto lender and asset manager based in Hong Kong. In addition to his words, Lei Tong stated that the majority of new destinations to be discovered are in North America and Europe, followed by countries in Central Asia and the Middle East.
According to a notice quoted by Reuters and confirmed by local authorities, he ordered a ban on new crypto mining projects in the state and stated that existing projects should be shut down. Cryptocurrency miners who create projects claiming to operate big data and computing centers will be penalized and companies will be banned from supplying power to mining operations.
Inner Mongolia, China’s third largest hub, also introduced new bans and launched an investigation into the industry.
China’s place in global Bitcoin mining
China accounts for more than half of global Bitcoin mining. The Xinjiang region accounts for about one-third of the total computing power and ranks as China’s largest bitcoin mining centre. According to data compiled by Cambridge University, the Qinghai region ranks ninth.
China also continues to tighten restrictions on cryptocurrencies after a global bull run in bitcoin prices reignited domestic speculation.
After the Chinese State Council restrictions, all three industry organizations banned crypto-related financial and payment services. The most important factor causing this situation is that the value of the crypto market has decreased by 1 trillion dollars in a short time.