China is not relenting in its crackdown on cryptocurrency mining and Anhui province is the latest province to announce a ban on cryptocurrency mining.
Located in eastern China, Anhui authorities said the ban on cryptocurrency mining will help mitigate the shortage of power that is majorly a result of cryptocurrency mining operations. Anhui authorities say that the action will help ease an acute power shortage over the next three years.
The development was first reported by state-owned Hefri Media Group which said that Anhui will shut down all cryptocurrency mining projects in a clean-up aimed at reducing power consumption, as the province faces a “grave” supply shortage of electricity.
The crackdown against cryptocurrency mining has been going on in China for quite some time now. These actions have contributed to the extreme volatility of the price of Bitcoin. A few weeks ago, authorities in the province of Sichuan, ordered that all Bitcoin mining activities be shut down. Sichuan has one of the biggest mining operations in all of the country, and shutting down its mining operations meant shutting down all mining operations in China. Before the crackdown in the province of Sichuan, other provinces where Bitcoin mining thrived were also sought after and shut down. Some of these provinces that have already been shut down include Inner Mongolia and Xinjiang.
Apart from the huge consumption of power, another reason for the crackdown against cryptocurrency mining and trading is the underlying risks, according to China’s state council.
Following the crackdown actions, more than $300 billion worth of cryptocurrency has been wiped off the market. China alone accounted for about 70 percent of the global Bitcoin production before the crackdowns become continuous and severe. More than three metric tons of Bitcoin mining rigs have been taken out of China after the clamp-down on Sichuan province.
Unlike Sichuan province, Anhui is not as big of a mining hub but mining operations still took place in the province. Miners in the province have already begun to shut down or are making plans of moving out to areas with laws and policies that favor cryptocurrency mining while also considering power costs and technological advancement in the area.
Anhui’s electricity demand is predicted to rise to 73.14 million kilowatts by 2024, with the province’s current supply at 48.4 million kilowatts, making the crackdown on mining operations one of the major ways to fill this big gap. Authorities also plan to push for reforms in electricity pricing to guide more economic use of power.
China’s crackdown actions coupled with other factors continue to be a threat to Bitcoin and cryptocurrency in general.