Sichuan Province Ban Expected to Spell “De-Chinafication” of Cryptocurrency Mining

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Sichuan has become the latest province-level administrative unit in China to place a ban on cryptocurrency mining, in move which analysts say portends a strict nationwide crackdown.

The Sichuan province development and reform commission in tandem with the provincial energy authority recently issued a notice mandating the closure of “virtual currency mining operations,” according to a 21 June report from Diyi Caijing.

The notice called for a total of 26 cryptocurrency mining projects uncovered by the Sichuan Electric Power Corporation to be closed prior to 20 June, as well as for regional power companies to undertake “self-inspection and self-rectification” and report the results to the authorities prior to 25 June.

Other domestic media reports indicate that as of 20 June Sichuan province authorities had cut the provision of power to cryptocurrency mining businesses operating within the borders of the province.

The crackdown on cryptocurrency mining in Sichuan Province follows the launch of similar campaigns in the province-level entities of Inner Mongolia and Qinghai, on the grounds of environmental and resource concerns.

On 18 May Inner Mongolia launched a platform to process tips from the public on cryptocurrency mining activities, while shortly afterwards the 51st meeting of China’s Financial Stability and Development Committee (FSDC) called for “striking against Bitcoin mining and transactions.”

Observers point out that while crackdowns on cryptocurrency mining in places like Inner Mongolia and Xinjiang were justified on the grounds of the heavy pollution caused by their coal-fuelled power plants, the closures in Sichuan mark a change of tack given that the huge inland province is a major source of hydropower.

“Because Sichuan is rich in hydropower resources and they’re wasted if left unused, in the past there was the opinion in Sichuan that they should be used to support [cryptocurrency] mining and poverty alleviation,” said one cryptocurrency miner to Diyi Caijing.

“This can be said to be a thorough farewell,” said another member of the industry. “The de-Chinaification of [cryptocurrency] mining has already commenced.”

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