China’s Inner Mongolia region has proposed to punish companies and individuals involved in digital currency mining.
Before this, China stated that it is necessary to severely crackdown on Bitcoin’s mining and trading. Their goal is to prevent transferring personal risks to the social realm.
The world sees these comments as Beijing’s intention to continue its four-year crackdown on bitcoin transactions and other cryptocurrency-related activities.
Inner Mongolia’s latest draft proposal aims to engage in virtual currency mining, such as telecommunications and Internet companies. The Inner Mongolia Development and Reform Commission said that their business licenses could be revoked if mining.
Cloud computing or data centers may cancel the preferential government support policies
Individuals who use digital currency for money laundering activities will also be severely punished
Inner Mongolia’s rough carriage on the mining industry began in March. It started after the country announced to ban new cryptocurrency mining projects and close existing activities to reduce energy consumption. The northern region of China failed to meet Beijing’s energy use target in 2019. It subsequently formulated plans to reduce energy consumption.
Miners use dedicated computers to solve complex mathematical problems, thereby effectively conducting Bitcoin transactions.
However, because computers are compelling, they consume a lot of energy.
According to the Cambridge Bitcoin Power Consumption Index, Bitcoin mining consumes approximately 112.57 watt-hours of energy each year, more than the entire country such as the Philippines and Chile.
China accounts for approximately 65% of global Bitcoin mining. Due to cheap energy, Inner Mongolia accounts for about 8% of the world, a larger share than the United States.
China’s hardline stance on cryptocurrencies is not new. China closed its local cryptocurrency exchange in 2017 and banned the so-called initial coin offering (ICO). However, even though the exchange has moved overseas, traders continue to operate in mainland China.
The censorship of Bitcoin mining in Inner Mongolia is when China is trying to go green. President Xi Jinping said that China’s goal last year was to reach peak carbon dioxide emissions by 2030. Also, China is eager to get carbon neutrality by 2060.
Though, a study published in Nature Communications indicated that Bitcoin mining might “undermine the country’s ongoing emission reduction efforts.”
The government will publicly consult these regulations before June 1. The rules are aimed at industrial parks, data centers, telecommunications companies, Internet companies, and even Internet cafes.