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Officials in China’s capital of Beijing are reportedly conducting checks on data centers hosting digital currency mining operators, according to Reuters. The purpose of the check being is to further understand the facilities’ impact on energy consumption.

According to their sources, the Beijing Municipal Bureau of Economy and Information Technology sent an “emergency notice” last Tuesday to the city’s data center operators to report if they’re involved in the digital currency mining businesses. If so, the agency requires them to report the amount and share of power consumed by block reward mining activities.

An unidentified bureau official cited by Reuters said that city authorities directed the probe, and the recipients of the notice include China’s three biggest telecoms operators. Their source was not aware of the reason behind the effort or if it was part of a nationwide campaign.

State media outlet Pengpai confirmed the Reuters story later on Thursday, calling it “routine work.” China-based blockchain journalist Colin Wu downplayed the news on Twitter noting that: “This caused some panic in China. However, the Chinese government said it was only conducting an investigation. Data centers are difficult to use for Bitcoin mining, and are mainly used for ETH Filecoin.”

The Chinese region of Inner Mongolia announced it would shut down all digital currency mining operations by the end of the month as part of a broader initiative to improve energy efficiency. Block reward mining requires an enormous amount of computing power and thus electricity. It’s largely viewed as a wasteful valueless sector.

Just recently, a thorough security inspection at power plants in Xinjiang following a coal mine accident interrupted block reward mining and contributed to volatility in BTC prices.

Edward Lu, senior vice president of Canaan Inc, said, “China used to be a place where cryptocurrency mining was thriving, but the business is shrinking due to policies.” The Chinese manufacture of ASIC mining machines increasingly sees its clientele come from outside of China in Canada, northern Europe, and central Asia, which have cheap and abundant electricity and transparent and predictable regulations.

See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”

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