Wu said exclusive: Sichuan Financial Office issued a document requiring enterprises to withdraw from virtual currency mining

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Wu Blockchain exclusively learned that on April 29, the Office of the Sichuan Provincial Financial Work Leading Group issued the "Notice on Guiding Enterprises to Orderly Exit Virtual Currency "Mining" Activities". This notice is currently being implemented in various counties and cities. Previously, local governments in Sichuan's marginal poverty-stricken areas tried to use the mining industry to absorb abandoned water and electricity and fight the economic recession caused by the epidemic. This notice will hinder local governments' support for the "mining" industry.

The notice stated: Due to the recent rebound in foreign virtual currency trading prices, some companies have gone to wind power and hydropower areas to engage in "mining" activities under the banner of "blockchain" or high-tech industries. At present, some companies are promoting virtual currency "mining" activities as part of the country's encouragement of the development of the blockchain industry, attracting investors to follow suit, which may pose a greater risk of investment speculation, illegal fundraising, pyramid schemes and fraud.

Wu said the notice obtained by Blockchain requires that multiple measures be taken to promote enterprises to accelerate the withdrawal from "mining" activities. At present, the policy orientation of various ministries and commissions on virtual currency "mining" activities is highly consistent, and the work requirements for guiding withdrawal have not changed. In the early stage, the province has issued two notices, requiring relevant cities (prefectures) to actively guide enterprises within their jurisdiction to orderly withdraw from "mining" activities.

The notice requires that the rectification offices of all cities (prefectures), especially those in areas with abundant hydropower resources such as Ganzi, Ya'an, Leshan, Aba, and Liangshan, strengthen risk investigations, stop investment promotion activities of companies suspected of "mining", and actively coordinate with the Development and Reform, Economic and Information Technology, Market Supervision, and Taxation departments to comprehensively adopt compulsory measures such as power supply, electricity prices, land, taxation, and environmental protection to promote the orderly withdrawal of existing companies from mining activities.

Wu said blockchain learned that in mid-May, the notice had been issued to all cities and counties, and corresponding documents were also issued. On May 21, Muli County issued the "Notice on Reporting Virtual Currency "Mining" Activities". The notice pointed out that from the date of issuance of this notice, all hydropower generation companies in our county shall immediately stop the investment promotion of virtual currency "mining" activities and shall not add new virtual currency "mining" projects. Otherwise, our bureau will recommend that the county people's government investigate and deal with illegal construction projects, and take administrative measures such as abolition, fines, and self-demolition orders until they are transferred to the People's Court for compulsory execution.

This incident once again highlights the differences of opinion between financial and industry managers within the government. The notice also deliberately emphasized that " the policy orientation of various ministries and commissions on virtual currency "mining" activities is highly consistent, and the work requirements for guiding withdrawal have not changed ", which seems to have been under pressure from a higher level.

At the central level, on January 2, 2018, the Leading Group of the Internet Financial Risk Special Rectification Office issued an internal document requiring local governments to guide enterprises under their jurisdiction to orderly withdraw from the "mining" business and regularly report on their work progress. The document pointed out that the mining industry wastes resources and encourages virtual currency speculation. The draft of the 2019 National Development and Reform Commission's industrial structure adjustment guidance catalogue for soliciting opinions once listed cryptocurrency mining as an eliminated industry, but the main text was deleted on November 6. The Energy Bureau is under the jurisdiction of the National Development and Reform Commission, and it is reported that insiders have studied the use of mining to absorb abandoned water and electricity.

At the local level, it is reported that in March, Sichuan studied how to deal with the economic recession caused by the epidemic, and had studied the promotion of the mining industry to the economy. This may be the reason why Ya'an, Ganzi and other places have subsequently issued articles to promote the development of blockchain. In April, Ya'an officially issued the "Implementation Opinions on the Construction of Hydropower Consumption Demonstration Zone to Support the Development of Blockchain Industry", and Ganzi Prefecture also held the highest-level "Blockchain Industry Development Seminar". Among the first batch of "Hydropower Consumption Demonstration Enterprises" recently announced by Sichuan, there are several mines among the 99 companies that entered. This notice from the Sichuan Provincial Financial Office will hinder local government support for the mining industry.

The "Ganzi, Ya'an, Leshan, Aba, Liangshan and other areas with abundant hydropower resources" listed by the Financial Office are the most economically backward areas in Sichuan. They are financially difficult and debt-ridden. They have abundant hydropower resources but cannot use them. "Mining" has become almost the only industry that does not bring pollution and can generate revenue.

Premier Li Keqiang stressed that in order to coordinate the prevention and control of the epidemic and economic and social development, it is necessary to increase efforts to stabilize employment, finance, foreign trade, foreign investment, investment, and expectations in a more targeted manner, and more effectively respond to the impact of the epidemic on economic operations. The first of these is to stabilize employment . Wu said that the mandatory requirement for mines to withdraw will not only seriously affect local finances, but also seriously affect the employment of employees in local mines, electricity, energy, infrastructure and other departments after the epidemic.

"Mining" itself is just the process of producing Bitcoin. The central bank pointed out in 2013 that Bitcoin is a virtual commodity. Bitcoin trading is a commodity trading behavior on the Internet. Ordinary people have the freedom to participate under the premise of assuming their own risks. Therefore, mining is not illegal under the current regulations, and the central government has repeatedly emphasized that in the economic field, "anything is allowed unless prohibited by law."

In the future, the mines in the hydropower consumption demonstration area in Sichuan will become "regular troops" to a certain extent, and the mines with direct power supply will be subject to stricter inspections. But this year, the mines in the hydropower consumption demonstration area have not been built so quickly, put into operation on a large scale, and use electricity. In short, due to the halving of Bitcoin, large-scale power outages, the swing of government policies, and the increase in various inspections brought about by compliance, the miners in this year's flood season may not have an easy time.