China wants bitcoin mines to close shop within a week
CGTN's April Ma
“Bitcoin mines” in China, clusters of powerful computers that work non-stop in electricity rich regions, may soon meet their demise as a central level Internet finance regulatory group continues to clamp down on cryptocurrencies, which the nation has dubbed risky and shady.
Local finance authorities have been requested to guide bitcoin mining outfits to clear out through a combination of measures, such as elevating electricity prices, restricting land usage, levying higher taxes and barring them from operation through tough environmental policies, read a copy of a document circulating online.
The orders, which appear to have been issued by the special office under the central bank overseeing risks in Internet finance, demand its local counterparts to report progress made in ushering exits in each jurisdiction by the 10th this month.
Citing immense energy consumption and their role in exacerbating speculative investments in the virtual currency, the regulators want bitcoin mines shuttered, the document says.
China is one of the world’s dominant bitcoin miners, primarily due to cheap electricity, often produced by private, illegal power plants such as those in Sichuan, which has abundant hydropower, or Inner Mongolia, with ample wind power resources. Investors and enthusiasts lease powerful computers, called mining machines, from bitcoin mines and hope to cash in on the bitcoin boom as their machines reap rewards in bitcoin for their computational power.
The message that bitcoin and other cryptocurrencies are no longer welcomed as an innovative adjunct to the financial system, but rather a disruptive force, often a tool for illegal fundraising and risky speculation, has been made loud and clear. In September last year, regulators stipulated that initial coin offerings are unauthorized fundraising activity, and bitcoin trading platforms were given an October deadline to terminate their operations.
Earlier this week, People’s Daily published an editorial calling bitcoin a bubble that is bound to burst, as it has no intrinsic value, and predicted that the music would soon stop, ending an orgy and shaking investors out of their craze.