The People’s Bank of China (PBOC) has apparently set itself the goal of more vigilant monitoring and regulation of the energy consumed by the mining of cryptocurrencies. This should, among other things, reduce the increased demand for electricity in the People’s Republic.
China is one of the biggest sources of mining power to mine bitcoin and other cryptocurrencies. Meanwhile, a veritable market has developed for the provision of computer computing in the People’s Republic. Conversely, however, this also means that the more intensively China is handled, the higher the energy consumption and energy demand in the country rise.
At this point, the Chinese central bank would now like to start. As reported by consistent international media, the PBOC is planning a stronger regulation of energy consumption spent on mining cryptocurrencies. As a possible effect, the officials seem to hope for a reduction of the mining revenue and thus a collapse of the Chinese mining market.
As the central bank responsible for monetary stability, the People’s Bank of China, while not directly intervening in the energy supply of the Chinese people, has the ability to use indirect leverage. For example, the central bank can instruct regional governments to control and, if necessary, limit the energy supply of the local population in order to prevent the use of energy and hence the processing power to mine cryptocurrencies.
This could once again push the Chinese government against the circulation of cryptocurrencies in their country. Already last year, a series of bans from China caused quite a stir in the crypto markets. Thus, the People’s Republic had banned ICOs as a source of revenue in September 2017, shortly thereafter also to close the largest crypto-trading centers in the country. With the impending curtailment of the energy supply for crypto-miners, the central bank also seems to want to eliminate the third pillar of the adaptation of crypto-currencies.
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