Following the banning of cryptocurrency trading and Initial Coin Offerings (ICO) issuance in China, the miners are now also being targeted, Bloomberg reports. Several companies have already announced plans to expand their business to other countries. The business for miners is becoming increasingly difficult in China as they will have to submit a status report to the local authorities on a monthly basis. In the long term, they should be moved to the complete exit from the mining business with the new order.
The local authorities of Xinjiang Province have recently issued an order to limit power consumption by mining cryptocurrencies. The schedule should be based on media reports on a decision by the Chinese central bank last Wednesday. According to this, the miners must in the future submit a status report on their activities every four weeks. The province of Xinjiang in northwestern China wants to act against “highly speculative and energy-intensive” companies that specialize in the digging of digital currencies. According to the order, this is intended to limit financial risks and induce companies to turn to other business areas. The ultimate objective of the measures ordered is to persuade companies to opt out of mining in the long term. All affected companies must notify each month by no later than the 5th, what is their business or when the exit should be carried out. Chinese miners play a major role in maintaining bitcoin, for example, in Sichuan and Yunnan provinces, electricity is very cheap. The action against high power consumption should now be coordinated. This could be the pricing of electricity, the amount of taxes to be paid or other environmental measures, for example, in order to induce entrepreneurs to abandon them sooner or later.
The news agency Bloomberg reports the expansion of mining company Bitmain to Singapore, the US and Canada. Competitor BTC.Top, however, wants to establish branches in Canada. The decision was made for Canada on the basis of relatively low energy prices and the stability of political and economic conditions, BTC.Top founder Jiang Zhuoer told Bloomberg. ViaBTC, however, announced new offices in Iceland and the US.
Even though the price of electricity in some Chinese provinces is unrivaled, all mining companies will sooner or later have to relocate their headquarters completely abroad. The government in Beijing has been very anxious for months to regain full control of all cash flows. Unless the current measure should bring the desired success, the next logical step would be the complete ban on all Chinese miners. That would be a bitter setback for the community as well as for the crypto currencies themselves.
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