Officials in China’s Inner Mongolia eye shutting down block reward mining farms

Getting your Trinity Audio player ready...

Government officials of China’s Inner Mongolia autonomous region are seeking public feedback on proposed changes to existing local regulations. One proposal under consideration would effectively shut down all digital currency mining farms in the area.

The Inner Mongolia Development and Reformation Commission published the proposal last week. It comes as part of a broader initiative around regulatory measures that help the region achieve energy-saving goals under China’s 14th five-year economic plan, accelerate the promotion of high-quality development, and promote the construction of ecological civilization. 

As part of the scope to reign in energy-intensive industries, the government agency’s proposal would “properly control the development scale of data centers and strictly prohibit new virtual currency mining projects.” It also sought to “completely clean up and shut down” existing virtual currency mining projects intending to close all before the end of April 2021. 

The energy-rich Inner Mongolia region is the third-largest spot in China, after Sichuan and Xinjiang, where most BTC mining farms set up operations. The public consultation period for soliciting opinions will last until March 3.

The Development and Reform Commission of the Autonomous Region, the Department of Industry and Information Technology of the Autonomous Region, and the Energy Bureau worked together to draft the plan. The Inner Mongolia DRC is the local chapter of China’s National Development and Reformation Commission (NDRC), the nation’s highest-level economic planner. It is one of the 21 cabinet ministries that form the State Council.

This motion is not the first time Chinese officials have flirted with the idea to ban the digital currency mining industry. In 2019, the NCRD put forward a draft to update its guidance on industrial reorganization. Initially tucked within the draft was a recommendation to add digital currency mining to a group of industries that the region should eliminate. After the public consultation process, the agency removed the language about digital currency mining in the final reorganization guidance. 

As recently as last August, government officials in the Inner Mongolia region stripped the electricity perks for 21 BTC mining farms to curb blockchain mining activities. Industry leaders Bitmain and Ebang were affected during that crackdown.

According to a Reuters article, Inner Mongolia was the only region of 30 mainland areas under government regulator’s energy consumption and energy intensity review that failed to reach energy-saving goals in 2019. In 2016-2019, energy intensity in Inner Mongolia grew by 9.5%, while overall energy consumption rose by 65.62 million tonnes. 

This distinction earned the region criticism from the central government in September because of its poor achievement. Now, the region hopes to cap energy consumption growth at about 5 million tonnes of standard coal equivalent in 2021 and reduce energy intensity by 3% from 2020 levels.

“(Inner Mongolia) will tighten its energy control measures and bear the targets throughout all economic and social aspects,” announced the draft rule, adding it will strictly restrain blind expansion at organizations that consume a lot of energy.

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