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The local government of Sichuan has told power companies to immediately stop supplying crypto mining operations in the region.
Crypto mining was said to be continuing as normal despite the nationwide ban imposed last month
Hydroelectric miners have until September to leave, allowing them to utilize the summer rains
Sichuan province has escalated its crackdown on cryptocurrency miners by issuing an edict to energy companies to stop serving them. According to China journalist Colin Wu, authorities in Sichuan issued the request today, giving the energy companies one week to report the situation. The demand follows a meeting held last week between the energy regulator and Sichuan power companies which resulted in little to no action being taken on crypto mining activity in the region, leading to speculation that Sichuan authorities were intentionally dragging their heels in taking the action demanded by the national government.
On June 18, Sichuan officially issued a document requesting power generation companies are required to immediately stop supplying power to any virtual currency mining, and report the relevant situation on the 25th. https://t.co/O39TSETy0k
— Wu Blockchain (@WuBlockchain) June 18, 2021
Sichuan Crypto Miners Face Immediate Closure
Sichuan has long been the recognized home of crypto mining in China, with some 10% of Bitcoin’s hashpower emanating from the region at one time. However, China’s recent blanket ban on crypto mining has seen the industry thrown into disarray, with fossil fuel and hydroelectric powered mining farms targeted in equal measure as China aims to massively curb its emissions output.
Last week the South China Morning Post reported that hydroelectric miners were to be allowed to remain for the summer to make the most of the huge summer rains in the region, with a deadline of September imposed upon them to shut up shop. Miners using non-renewable sources will not seemingly be given such generous terms however, and while small scale mining operations will likely slip under the government’s radar, the large operators will have no choice but to immediately wind down operations this weekend for good.
Mining Networks Will be Further Decentralized
While the hashrates of Bitcoin, Ethereum and other proof-of-work coins will likely take a hit in the short term as Sichuan demobilizes, as they already have done, other mining operations will soon pick up the slack and restore the network’s security. This will allow countries like the U.S., which is seeing huge growth in renewable crypto mining, to fulfil their ambitions in taking back some of the Bitcoin and Ethereum hashrates, while also increasing the decentralization of the mining networks..