In recent days, there are many conflicting reports concerning the position of the Chinese government against bitcoin mining. Last week Bloomberg reported that the people’s Bank of China (PBOC) convened a meeting to discuss the termination of the mining companies in China, while the Chinese media has denied this information. However, since there were rumors that the government of Xinjiang decided on «forced suspension of activities» of companies in the mining industry in the region.
Despite the large number of assumptions about what the Chinese government can prohibit mining of bitcoin in the country, pooling outside the state’s largest mining companies of China gave hope to market analysts. They believe that a large part of the mining industry, bitcoins will be able to survive the ban of China.
The limitation of energy consumption for miners
January 3, Bloomberg
reported that «people familiar with the matter» told about the plans of the government to limit the energy consumption of bitcoin miners. A source said that among the Chinese officials is growing concern that high needs a major cryptocurrency mining farms violate the government’s plans for the distribution of energy within the country.
In November, the publicly available published document, which has been the subject of concern of the representatives of the cryptocurrency community. It said that state power company in Sichuan province plans to deal with bitcoin mining. However, then the organization denied
these rumors and stated that the document was misinterpreted due to translation errors, and that in fact it refers to «prioritize local demand for electricity».
In November there were comments of the Manager of the mining company operating in Sichuan province. He suggested that the local representation of energy companies can act on their own initiative, and not by decree from the Central government.
«When we first met with representatives of the hydropower plant, we told them that we are doing cloud computing, but the Manager of the energy company just laughed: «Nonsense, I know you came here to mine bitcoins. Just tell us, what is our benefit». With regard to local government, we do not have to meet any officials, the station will help in coordinating our work. And who can obtain the right to create a mining pool? The rule is very simple: first come, first serve».
Chinese media deny the rumors
China’s state media expected came to the defense of the government and began to refute the rumors about the prohibition of mining companies. 4 Jan Caixin published an article, which stated that «the Bank did not hold any meeting on 3 January» and «November 2017» the aim of official policy was to «encourage» the work of mining companies.
The article, however, argued that China «will no longer stimulate the activity of miners by providing them with benefits in the areas of taxation, energy and real estate.» It can be regarded as a confirmation of the Central government will seek to tighten control over the distribution of electricity in the provinces at the local level.
News from Xinjiang province
In the leaked document, according to which the Chinese government’s Xinjiang province intended to oblige the miners to hand over every month regulators report on the state of their business. This order was signed by the Committee, which has oversight over financial risks in the Internet. The information contained in this document are also confirmed by people close to the authorities.
«In Xinjiang, there are several companies that are engaged in the mining of cryptocurrencies. This is a very energy-intensive and highly speculative company. To reduce financial risks and stimulate the real economy, it is necessary to bring the leadership of these companies to «orderly» exit from this business», — the document says.
Also, the document says that the Commission of economy and information technology of Xinjiang will monitor information about the status of the mining companies (the company operates or has ceased its activities) and every month until the fifth day to pass this information to the Committee.
In a separate document from the report on the work of the financial markets, issued by the PBC, stated that «local governments should coordinate the actions of different departments in relation to measures regulating the prices of electricity, land use, taxation and environmental protection, aimed at forced termination of operation of mining companies».
Although it is unclear whether the policy of the province to spread to other regions, it suggests that state policy of China in the near future will be aimed at tightening control over the mining industry and, possibly, complete cessation of its activities.
Leading companies are leaving the country
Some analysts predict that the Chinese regulators will be able only slightly to affect large companies mining industry, as many of them have already announced their intention to work outside of the country after the ban of the ICO and the termination of cryptocurrency exchanges in the fall of 2017.
In October last year it was reported that the company is Bitmain planning to open regional headquarters in Singapore, and soon followed her to the markets of the USA and Canada. It is reported that other mining companies are also planning to work abroad, including the third largest pool of Btc.top, which is expected to begin its work in Canada, and fourth largest pool Viabtc, which now operates at facilities in Iceland and the United States.
And possible restrictions on mining, in General, do not cause panic in the Chinese cryptosuite, as it was with the introduction of the ban on ICO.
One of the Chinese miners, based in Sichuan province, said that Chinese mining companies continue to take a leading position in the industry and that regulators now too late to take action, as people become resistant to the rules.
Because of stricter government regulations, such large mining companies as Bitmain BTC.Top has already transferred its power abroad. Among the regions, where there are plans to move mining equipment, deals Canada, Iceland, USA, Iran and Russia.