On September 14, it was reported that regulators in inner Mongolia may be planning a crackdown on crypto mining in the autonomous Chinese province. According to the report, authorities are planning to curb crypto mining as well as other similar activities related to this industry.
In a notice, five departments within the government – The Financial Office, Development and Reform Commission, the Office of the Ministry of Industry, the Big Data Bureau and the Public Security Department – stated that they would be amending policies related to the mining industry. Because these agencies have deemed cryptocurrency mining as a “pseudo-financial” endeavor, it is felt that they add no real value to the economy.
At present, it looks like the immediate plan is for these departments to regulate and clean the mining industry within Inner Mongolia. To accommodate this plan, there will be a two-phase process that will be implemented. The first phase began on September 3 and will run until September 25, with the second beginning on October 10 and running until the end of the month.
The first phase will include a self-examination and self-correction where mining operations will be required to report to the Ministry of Industry and Information Technology by September 30. In October, the second phase will begin, which will be dedicated to the direct supervision and rectifying of the industry itself.
How this will impact the crypto mining industry is not known at this point. It is unclear exactly what “supervising and rectifying” will mean. Some, including crypto commentator Dovey Wan, believe that there will be no impact at all.
In a May report, it was concluded that China, Mongolia’s neighbor, is responsible for as much as 70% of the global SegWitCoin (BTC) mining. Mining operations in the Sichuan province are responsible for 70% of all of China’s BTC mining, thanks in large part to the massive amounts of electricity that are generated at the Dadu River Basin.
Despite the fact that China has become such a leader in this industry, there has been a growing push to eliminate crypto mining altogether. In April, China banned all ICOs and cryptocurrency exchanges. It was concluded that China was also looking to ban cryptocurrency mining completely, which has many wondering if this new policy in Inner Mongolia is an attempt to reach those aims.
Should that happen, it would not be surprising to see the vast number of these operations go underground. This is way too lucrative a business for people to simply close up shop.
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