Caixin
Jun 11, 2021 07:49 AM
BUSINESS & TECH

Qinghai Province Orders Closure of All Cryptocurrency Mines

What’s new: Northwest China’s Qinghai province joined the cryptocurrency crackdown by ordering a shutdown of all virtual currency mining operations in the region.

No new cryptocurrency mining project will be approved in the province, and all existing operations will be closed, the provincial industry and information technology regulator said Wednesday. It cited central government directives to curtail energy consumption and pollution and to maintain financial stability.

Qinghai’s move followed similar decisions by authorities in northern Inner Mongolia and the far western region of Xinjiang.

The context: China, the world’s biggest Bitcoin mining nation, has intensified a crackdown on cryptocurrency mining, reflecting authorities’ concerns over financial risks associated with virtual currency speculation and the environmental costs of the activity, which consumes vast amounts of electricity.

Energy consumption from Bitcoin mining in China is projected to peak in 2024 at around 297 terawatt-hours, generating 130 million metric tons of global-warming carbon emissions, according to a study from researchers at the University of Chinese Academy of Sciences, Cornell University, Tsinghua University and the University of Surrey.

As China works to implement its pledge to create a low-carbon economy and reach peak carbon emissions by 2030, policymakers are putting pressure on local governments to play their part.

Cryptocurrency mining gobbles up enormous amounts of power through the electricity consumed by the specialized computer equipment needed to solve the mathematical puzzles that produce the currency and through the energy needed to cool the machines and prevent them from overheating.

Tang Ziyi contributed to this story.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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