Bitcoin mining companies in Sichuan Province were forced to close due to lack of relevant supervision

Golden Finance News - According to foreign media reports, large-scale Bitcoin mining farms in southwest China are being shut down. Insiders pointed out that this is because the authorities believe that these Bitcoin mining farms lack relevant supervision.

The Chinese government’s lack of relevant support policies and regulatory regulations for Bitcoin mining projects has apparently prompted the Chinese government to take strong measures to stop many commercial Bitcoin mining projects in Sichuan.

China's Sichuan Province has attracted great interest from a large number of Bitcoin investors and entrepreneurs in recent years. The province is rich in hydropower resources, providing a large amount of low-cost electricity resources for Bitcoin mining companies in Sichuan.

The timing of the suspension of Bitcoin mining companies coincides with a critical period for the Bitcoin industry, as the price of Bitcoin has tripled in 2017. "The current Bitcoin price is so high," Yicai Global said in an interview with the media: "After closing the mining project, my daily loss costs are hundreds of thousands of yuan."

The reports conflict with the Chinese government’s recent decision to once again allow deposits and withdrawals of digital currencies on major bitcoin exchanges. The People’s Bank of China is reportedly set to unveil bitcoin regulations in June aimed at preventing money laundering.

Zhang Jun, senior analyst at Tai Cloud Research Institute, told the media that "the Bitcoin regulation carried out by the central bank is mainly focused on financing and Bitcoin transactions through platforms." Sichuan government officials agreed with Zhang Jun's opinion, saying that "Bitcoin mining companies are established by these companies themselves." This means that Bitcoin mining companies are outside the regulatory scope of China's legal management agencies.

It seems that the Chinese government's actions to regulate Bitcoin transactions and crackdown on Bitcoin mining companies are contradictory, but foreign media commentators believe that there is actually a clear logic behind it, and both are beneficial to China's development.

On the one hand, a regulated Bitcoin industry can promote the development of China's economy and protect the interests of investors. On the other hand, cracking down on Bitcoin mining companies can prevent the emergence of more economic projects that are not regulated by the state.

For a country, the legitimacy and existence of Bitcoin depends on whether it can provide as many and efficient services as possible for national development. The risk of autonomous economy brought by Bitcoin is that Bitcoin may penetrate those regions and provinces with autonomous rights, which is a potential threat to national unity and stability, so it will be taken seriously.

Taking two seemingly contradictory actions may indicate the Chinese government's future attitude towards cryptocurrencies. It is very likely that the government will seek to guide the Bitcoin industry that can adapt to China's current economic environment and regulation as some components of the Chinese economy. This may weaken the development of the cryptocurrency industry in China and pose new challenges to China's ability to regulate its own economy.