China is doubling down on crypto mining operations with a revised plan for energy conservation. The new resolutions explicitly aim to curb cryptocurrency mining activities due to excessive electricity usage and environmental reasons. Beijing's updated anti-mining measures follow in the footsteps of similar recent developments in the United States and European Union, both targeting crypto mining in their legislation.
Beijing is "censoring virtual currency mining"
The plan, authored by twelve of Beijing's municipal departments, is currently limited to China's capital city but with clear ambitions to grow nationwide. In the paragraph titled straightforwardly "Censoring virtual currency "mining" activities" (as per Google's translation), the document lauds the ongoing "rectification of "mining" activities" and calls for implementing national requirements for "cleaning up" virtual currency mining activities "in accordance with laws and regulations."
The paragraph doesn't detail specific measures against Bitcoin mining. However, energy conservation measures are spread all over the document with regard to various issues, such as controlling the turn-on time of street lights or indoor temperatures. Basically, it's about full-on monitoring and regulation – hardly surprising for China.
The opening paragraphs provide the ideological context for anti-mining and other energy-saving objectives, naming the key goal as implementing "a comprehensive conservation strategy" and "actively and steadily" promoting "carbon neutrality" – as decreed by the Communist Party and enforced by "energy conservation officers."
Is there a worldwide crackdown on Bitcoin mining?
Beijing's initiative is a follow-up to the countrywide crackdown on crypto. In 2021, Chinese authorities issued a blanket ban on cryptocurrency transactions and mining after raising concerns that cryptocurrency speculation could disrupt the country's finances and economy. The new legislation sent the China-based Bitcoin mining market spiraling down from between 65% to 75% of the total network's "hash rate" to absolute lows. Still, the industry survived underground and quickly rebounded to over 20% of the global market. Most cryptocurrency mining operations were forced abroad.
It's worth noting, that from the environmental perspective, the ban was an absolute disaster. Miners who enjoyed access to clean hydro power had to look for less eco-friendly energy sources, such as coal and gas, in Kazakhstan, Thailand, and the United States.
Crypto miners are looking for safe havens. El Slavador may be a viable option
With an uptick in legislation hitting crypto mining, the industry is looking at tough times ahead. Miners may have to look for safe havens outside the world's biggest economic powers. Welcoming destinations include El Salvador. Last year, the country announced a public-private partnership with an intention to pump $1 billion into creating one of the world's largest Bitcoin mining farms.
