Miners in Qinghai have been ordered to halt operations by a new government directive.
The Chinese province of Qinghai has declared a new restriction on Bitcoin and other cryptocurrencies mining.
All cryptocurrency mining enterprises will be obliged to shut down, according to a new document issued by the Qinghai Industry and Information Technology Department on Wednesday morning, and no new miners will be authorized to operate in the province.
The provincial administration of Qinghai will also conduct random inspections of firms to guarantee compliance with the new regulations.
It’s part of a larger effort by the Chinese government to reduce carbon emissions; crypto mining is inherently energy-intensive, and the Chinese grid is still heavily reliant on coal.
Qinghai is the third Chinese province to declare crypto mining illegal. Similar province-level orders have been issued by the governments of Xinjiang and Inner Mongolia, while the Chinese State Council called for a nationwide crackdown on crypto mining in May.
The crypto market tanked in May as a result of increased scrutiny in China; following news of the Chinese State Council’s new guidelines (combined with some pessimistic tweets from Tesla CEO Elon Musk), Bitcoin’s price plummeted from the high $50,000s to the low $30,000s.
According to data from Cambridge University’s Center for Alternative Finance, the majority of the computational power underlying the Bitcoin blockchain has historically been centralized in China, but restrictions like these have prompted some miners to transfer to nations like Kazakhstan.
Crypto mining is becoming a developing sector in the United States as well. Environmentalists, as well as certain state lawmakers, have been vocal in their opposition.