Sunday, April 21, 2024

China considers severe sanctions for Bitcoin mining – Economy – digital currencies


Inner Mongolia, China is considering imposing sanctions on companies and individuals involved in cryptocurrency mining activities, as part of the implementation of proposals aimed at stricter measures against these activities.

Chinese Vice Premier Liu He said last week that it was necessary to “crack down on Bitcoin mining and reduce business activities.” According to CNBC, the comments are seen as Beijing’s intentions to continue a four-year campaign to curb Bitcoin trading and other activities related to cryptocurrency mining.

Preliminary proposals from the Inner Mongolia Region target companies such as telecommunications and Internet companies that are involved in virtual currency mining activities. And the Inner Mongolia Development and Reform Commission has warned against revoking the licenses of these companies if they are shown to be involved in cryptocurrency mining activities.

The proposal includes canceling preferential government support policies granted to cloud computing companies and data centers, as well as imposing sanctions on people involved in money laundering through digital currencies.

Inner Mongolia is an autonomous region located in the north of the People’s Republic of China, with an area of ​​1,183 million square kilometers, equivalent to 17% of the area of ​​China.

Inner Mongolia’s hardline stance on mining began last March after it announced its plans to ban new cryptocurrency mining projects and shut down existing activities with the aim of reducing energy consumption.

Cryptocurrency mining units use specially designed computers that solve complex mathematical equations that effectively allow a Bitcoin mining transaction to occur.

Computers consume large amounts of electrical energy, since mining a Bitcoin consumes around 112.57 terawatt hours of energy per year, which is equivalent to the electricity consumption of more than an entire country such as the Philippines and Chile, according to Cambridge Bitcoin Electricity . Consumption Index, which is an affiliated project of the University of Cambridge.

China alone accounts for 65% of the world’s Bitcoin mining activities, while Inner Mongolia alone accounts for around 8% globally due to its cheaper energy prices, a higher proportion than allocated to the United States.

China’s strict stance on cryptocurrencies is not new, it was shut down by local cryptocurrency exchanges in 2017, and in the same year, it banned so-called Initial Coin Offerings (ICOs). However, merchants continued to operate despite foreign trade.

Inner Mongolia’s proposals come as China tries to switch to a green environment, and President Xi Jinping said last year that his country aims to reduce carbon dioxide emissions by 2030.

The energy consumption of Bitcoin mining operations returned to the spotlight earlier this month after Tesla CEO Elon Musk said that the major electric car maker would stop accepting digital currency to buy the cars. it produces, citing environmental concerns about widespread mining.

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Ebenezer Robbins
Ebenezer Robbins
Introvert. Beer guru. Communicator. Travel fanatic. Web advocate. Certified alcohol geek. Tv buff. Subtly charming internet aficionado.

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