Following China, several countries plan to "ban Bitcoin mining"

Since May 2021, my country has launched a crackdown on virtual currency "mining". Inner Mongolia, Yunnan, Xinjiang, Qinghai, Sichuan, Anhui, Hebei, Jiangsu, Zhejiang, Fujian, Hainan and other provinces have taken action one after another.

On January 18 this year, Jin Xiandong, director of the Policy Research Office of the National Development and Reform Commission, said that positive progress has been made in preventing and resolving major risks in 2021. The rectification of the entire chain of virtual currency "mining" has achieved significant results.

In fact, our country has been continuously increasing its efforts to clear out virtual currency "mining".

China continues to increase pressure

On January 10, the National Development and Reform Commission revised the "Guidelines for Industrial Structure Adjustment (2019 Edition)". In the elimination category of "I. Outdated production process equipment" and "(XVIII) Others" in the "Guidelines for Industrial Structure Adjustment (2019 Edition)", the seventh item was added, which is "virtual currency 'mining' activities".

In addition, some provinces have either initiated or strengthened the rectification of virtual currency "mining" activities.

On January 19, the State-owned Assets Supervision and Administration Commission of the Inner Mongolia Autonomous Region organized a work meeting on the rectification of virtual currency "mining" activities by investment and supervision enterprises. At the meeting, the Planning and Development Department conveyed the spirit of the relevant documents of relevant departments on strictly investigating and punishing "mining" activities, made arrangements for the next step of work, and required enterprises to strengthen leadership, clarify responsibilities, further carry out self-inspection and investigation, and strictly investigate and rectify virtual currency "mining" activities in accordance with the overall idea of ​​"closely monitoring, strictly preventing risks, strictly prohibiting increases, and clearing existing stocks", and report the investigation results on schedule.

On January 18, the Shaanxi Provincial Development and Reform Commission learned that Shaanxi Province has set up a virtual currency "mining" activity reporting platform to give full play to the role of social public supervision and improve the reporting channels for problem clues. The scope of reporting on the Shaanxi Province Virtual Currency "Mining" Activity Reporting Platform is as follows: virtual currency "mining" companies that disguise themselves as data centers to enjoy preferential policies in terms of taxation, land, and electricity prices; companies or individuals that provide site rental and other services to companies engaged in virtual currency "mining"; companies that obtain electricity supply through illegal means and engage in virtual currency "mining" activities; companies and Internet cafes that conduct "mining" in various other hidden forms.

On January 10, the official WeChat account of the Jiangxi Federation of Industry and Commerce stated that it will regulate virtual currency "mining" activities in an orderly manner in accordance with the law.

Multiple countries call for ban on BTC mining

It is worth noting that after China banned virtual currency "mining" last year, national regulators including Russia and the European Union are also calling for a ban on energy-intensive crypto mining models.

According to Bloomberg, the Russian Central Bank stated in a report released on January 20 this year that cryptocurrencies have the characteristics of pyramid schemes, undermine the sovereignty of monetary policy, and pose a threat to the Russian financial system. The report stated: "The potential financial stability risks associated with cryptocurrencies are much higher in emerging markets, including Russia. This is because people traditionally prefer to save in foreign currencies and their financial knowledge is insufficient."

The Russian central bank also said that the crypto mining industry undermines the country's green agenda, endangers Russia's energy supply, and amplifies the negative impact of the spread of cryptocurrencies, creating incentives for attempts to circumvent regulation. According to two people familiar with the matter, the Russian central bank's tough stance against cryptocurrencies coincides with the position of Russia's security services, which also support the implementation of a domestic competition ban to prevent cryptocurrencies from being used to fund the country's opposition.

According to the Financial Times, the EU's top financial regulator has once again called for a ban on the main mode of Bitcoin mining across the EU. Considering that PoW cryptocurrency mining is a highly energy-intensive business, Erik Thedéen, vice chairman of the European Securities and Markets Authority (ESMA), recently proposed a ban on this practice.

“We need to discuss how to move the industry to a more efficient technology,” Thedéen said. “The solution is to ban PoW mining. ”

As the director of the Swedish Financial Services Authority (FSA), Thedéen also highlighted how crypto mining has become a "national issue." He said: "The financial industry and many large institutions are now active in the cryptocurrency market, and they have (environmental, social and governance, or ESG) responsibilities. As ESG concerns permeate the industry, many crypto miners have begun to use more renewable energy. With a lot of renewable energy used for mining, Bitcoin is now a national issue in Sweden."

On January 10, the Kosovo government announced that it would work on banning cryptocurrency mining in order to solve the energy crisis. Kosovo Finance Minister Hekuran Murati said that the decision to temporarily ban all cryptocurrency mining until further notice was the right one in light of the country's current energy crisis. It would be very unfair if my government subsidized the profits of a few while burdening others. That is why it was necessary to make this decision to temporarily restrict the mining or production of cryptocurrencies so that more money can be saved for citizens in the end. The reason is that with the profits of some, the costs to taxpayers or their burdens increase.

In addition, on January 19, the chairman of the U.S. Federal Trade Commission (FTC) also stated that (production) Bitcoin and Ethereum use a lot of electricity.

There are also differences

Unlike other countries, Thailand’s retail cryptocurrency mining industry has received a boost due to China’s crypto mining ban. As Al Jazeera reported on Wednesday, Thai entrepreneurs and cryptocurrency businesses are increasingly using mining machines operated by Chinese miners.

For example, industry entrepreneur Pongsakorn Tongtaveenan started a mining machine resale business in Thailand, reportedly selling hundreds of ASIC mining machines from China to local small investors. According to Pongsakorn, the price of equipment such as Bitmain Antminer SJ19 Pro plummeted by 30% due to the withdrawal of Chinese miners, but only returned to normal amid growing local demand. Pongsakorn believes that the growing popularity of retail crypto mining in Thailand is due to people seeking stable income during the epidemic and investors becoming more optimistic about the future of digital assets.

A hydroelectric power plant in San Pedro de Poas (Alvaro Murillo), Costa Rica, has also been given new life with cryptocurrency mining operations, with more than 650 mining machines from 150 customers running non-stop through eight containers powered by a hydroelectric power plant located next to the Poas River.

In addition, mining operations in the United States, Kazakhstan and other countries are also gradually emerging. According to a comprehensive cryptocurrency research report released by Cambridge University, as of April 2021, China's share of the global Bitcoin mining market has dropped from 75.5% in September 2019 to 46%. Kazakhstan's computing power has soared five times, with its share rising from 1.4% in September 2019 to 8.2%. The United States' computing power share has risen from 4.1% in September 2019 to 16.8%. Other countries in the top five in global computing power include Russia and Iran. As of the end of August 2021, the United States' mining share was the highest in the world, accounting for about 35.4% of the global hash rate, followed by Kazakhstan and Russia. China's Bitcoin hash rate has dropped to zero.