China’s Inner Mongolia, a long-term favorite of miners because of its cheap electricity, banned all mining projects in April.
This follows the first proposals presented to prevent cryptocurrency mining issued by Chinese authorities in 2018.
Meanwhile, the price of Bitcoin (BTC) is recovering amid reports from the Chinese government.
On February 25, the Inner Mongolia Development and Reform Commission released a government plan that severely affects mining of BTC and cryptocurrency in general . It is stated that all these projects must be stopped in the region by the end of April.
The policy comes after the National Development and Reform Commission (NDRC), China’s leading economic planner, declared Inner Mongolia to be the only province not to limit energy waste in 2019. The high energy of BTC could be the main driver of this decision.
The goal of the Chinese authorities‘ continued efforts is to reduce energy consumption to nearly 1.9% by 2021.
Beijing’s commitment to carbon emissions versus BTC
The draft plan also indicates that the region is currently seeking to reduce emissions per unit of gross domestic product (GDP) by 3% this year. The incremental growth in energy use is supposed to be controlled at around five million tonnes of standard coal. This could be a real-time sign of the environmental concerns surrounding Bitcoin .
As Wu Blockchain, a Chinese crypto mining news provider, tweeted , ending the energy-intensive mining practice is also part of „China’s commitment to the global emissions target. carbon in 2020 ”.
The journalist added that Inner Mongolia has always had more restrictions on the mining of cryptomonnaie . For their part, the three other major mining provinces – Xinjiang, Sichuan and Yunnan – „have not taken any measures for the moment“.
Restrict BTC mining in the coming years?
The announcement is hotly discussed across the crypto mining industry . The Chinese government has been lobbying the industry for years, citing concerns about wasted energy, speculative bubbles and fraud.
Inner Mongolia is famous for its inexpensive energy. Before the ban was announced, the region accounted for over 8% of Bitcoin’s global mining computing power (BTC), according to the Bitcoin Electricity Consumption Index .
Overall, China has the largest average monthly hash rate breakdown, over 65%.
Some fear that China will eradicate cryptocurrency mining altogether . Since 2017, Beijing has banned initial coin offerings (ICOs) and has hampered digital currency trading in the country. Thus, many players in the mining sector, such as Bitmain Technologies Ltd., have moved abroad, resulting in a 25% decrease in the mining sector in China.
Bitcoin is on the rise again
Following this recent news from Inner Mongolia, Bitcoin has rebounded after briefly touching $ 43,000 on February 28. The price of BTC is now expected to gradually return towards $ 50,000 as the weekly technical indicators appear to be bullish.
At the time of the layout of this article, the flagship cryptocurrency is trading at just over $ 48,100 , gaining nearly 8% in 24 hours according to CoinGecko . Its market capitalization is once again approaching $ 900 billion.