Bitcoin Miners in Sichuan Province Ordered to Shut Down in ‘Orderly Manner’

The Chinese province is said to be home to roughly 10 percent of Bitcoin's global hash power.

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.

Miners in Sichuan have been targeted before

Home to branch offices of Bitmain, AntPool, and other major mining corporations, Sichuan has long been recognized as one of the regions of the world with the most conducive conditions for Bitcoin mining. The region is known for its cheap electricity (much of which is sustainably generated during the rainy season) and naturally cool climate–factors that the Bitcoin mining industry finds very attractive.

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Therefore, it may not come as much of a surprise that this isn’t the first time that local authorities in Sichuan have gone after miners in the region. In late December of last year, Chinese news outlet 8btc reported that the local government in Sichuan’s Garze Tibetan Autonomous Prefecture has recently demanded a cleanup in the region’s mining sector.

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.