Another Chinese province has banned cryptocurrency mining

Jul 19, 2021

Another Chinese province has banned cryptocurrency mining

After Sichuan, Anhui Province announced a ban on cryptocurrency mining and said the move would help alleviate energy shortages over the next three years.

Anhui Provincial Government will shut down all virtual currency mining projects to reduce energy consumption as this place faces severe power shortages.

At the end of May 2021, the State Council of China committed to strictly control mining and trading in cryptocurrencies due to possible financial risks.

Anhui doesn’t have many virtual currency mining companies, but this move shows an attempt to tighten control over virtual currency mining activities in China.

To limit electricity consumption in Anhui, the province plans to shut down large crypto mining farms. The local government also intends to use new methods of building data centers and promoting electricity price reform to optimize energy consumption in the province.

The province’s electricity demand is expected to rise to 73.14 million KW by 2024, while the current supply can only guarantee about 48.4 million KW, which leads to a large gap between supply and demand. Officials say they will push for electricity price reform to increase savings.

Before that, the big Bitcoin mining centers like Sichuan, Inner Mongolia and Xinjiang. Before the ban was passed, China accounted for 70% of the Bitcoin network’s global hashrate.

The ban by many provincial governments has shut down more than 90% of bitcoin mining pools in China, forcing virtual currency miners to relocate their operations overseas.

Investors are less interested in virtual currencies after the Bitcoin collapse

Trading volume on the largest exchanges, including Coinbase, Kraken, Binance and Bitstamp, fell more than 40% in June after the crashes of Bitcoin and other cryptocurrencies.

In June, Bitcoin temporarily fell to $ 28,908. At the same time, the daily transaction value reached 138.2 Billion USD on June 22nd, 42.3% less than the peak day in May.

However, Reuters cited the report that China was the main catalyst for the decline in trade volume. Beijing’s tightening of measures to combat the cryptocurrency industry had a bigger impact than ever. It directly affects the price of bitcoin as well as bitcoin mining operations that mainly take place in this country.

Teddy Vallee, Chief Investment Officer at Pervalle Global, said, “China’s aggressive cryptocurrency activity has created a lot of fear in the market. The crypto ecosystem was attacked directly. That has consequences. ”Vallee emphasized that he had not seen large inflows of money into the exchanges, with a lower number of new wallet openings.

Vu Hao (according to Reuters)



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