Rainy Season Will Test Just How Watertight China’s Bitcoin Mining Ban Is
Some Chinese provinces appear to be cagey about whether they will ban crypto miners from operating during the country’s rainy season – a time of the year when rivers swell and hydropower stations typically produce high quantities of surplus electricity.
Per reports from the 21st Century Business Herald and STCN, Sichuan, one of China’s biggest traditional Bitcoin (BTC) mining hotspots, is “in no rush” to boot miners out before the start of the rainy season. Instead, it could allow BTC miners to operate unfettered until at least September.
As previously reported, a meeting of provincial officials, miners, and local power chiefs appeared in a relaxed mood last week, with some sources claiming that “all” was “OK” for miners in the province – unlike miners who have been relying on coal-sourced electricity in other hotspots like the Xinjiang Uygur Autonomous Region (XUAR) and the Inner Mongolia Autonomous Region (IMAR). The latter two have been way behind on carbon emissions reduction targets, with China aiming for net-zero emissions by 2060.
Despite claims that provinces would inevitably fall into line with Beijing’s wishes, with a countrywide crackdown ongoing, this appears not quite to be the case.
When pushed by the media, Sichuan officials were reluctant to comment on its official policy toward miners, instead remarking that its “preliminary research” into whether it would enact a shutdown of commercial miners in the province was “not yet ready to be revealed to the public.”
One media outlet claimed that commercial mining companies have been told to “prepare” to leave the Sichuan by September, but that no firmer conclusions had yet been reached. The Chinese rainy season typically begins in mid-June and ends sometime in mid-July, although heavy monsoon rains are common throughout the summer months. This typically causes river speed to increase significantly, producing surplus energy that miners have happily used up at low prices.
Showing miners the door at this stage would essentially leave the province’s hydropower providers with no customers for the excess power on the eve of the season’s start.
In a further sign that the crackdown may not be as bulletproof as once suggested, the media outlets reported that there was evidence smaller-scale “home” miners were not being targetted – and it was currently “just corporate miners” who had fallen foul of the government’s latest policy.
However, if Sichuan is able to demonstrate it can sustain its mining industry over the summer without a spike in emissions, Beijing may be given pause for thought.
The Herald’s report contained quotes from the head of the regulatory China Banking and Insurance Regulatory Commission, who claimed that tighter auditing was on the cards, but conceded that “domestic mining is still difficult to completely ban.”
The same media outlet quoted domestic miners as stating they were living in hope of policy changes, and were still reluctant to move overseas. Chinese miners are aware their activities often contribute to the often poorer local economies they operate in with jobs and taxes – and that most areas are loath to let spare power simply go to waste.
Instead, the report’s author, remarked, most miners have decided to adopt a “wait-and-see” approach – and will not be hurried into moving abroad.
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