Can China’s Central Bank Starve Bitcoin Miners of Power?
The People’s Bank of China believes it can reduce the scale of domestic bitcoin production by ordering local governments to crack down on power consumption by miners, according to sources speaking to Reuters.
According to the source the Chinese central bank told the Leading Group of Beijing Internet Financial Risks Remediation at a meeting held towards the end of 2017 that while it isn’t in a position to directly regulate power usage by bitcoin miners, it can still put pressure on production by ordering local governments to do so on its behalf.
Analysts note that China has emerged as one of the world’s biggest countries for bitcoin mining, an activity which involves the intensive use of computers to generate virtual currency, as well as copious energy consumption.
Players in the domestic cryptocurrency scene have expressed concern, however, that Beijing could impose a crackdown on bitcoin mining in 2018, following stern measures to contain Chinese Fintech activity last year.
These included a ban on initial coin offerings and Bitcoin financing that led to the closure of some of China’s top cryptocurrency trading platforms, as well as a crackdown on Internet micro-lending that saw the suspension of all further approvals for new platforms.