As recently reported, China’s central bank, the People’s Bank of China (PBoC), recently discussed limiting the power use of bitcoin mining operations, according to an unnamed source. Although some news outlets disputed the discussion ever occurred, China’s bitcoin miners aren’t risking it, and are already shifting their operations overseas.
According to Bloomberg, the potential move has seemingly worried some of China’s largest bitcoin mining organizations, who are currently working on mining the cryptocurrency in other countries. Bitmain, which runs the two largest bitcoin mining operations, is reportedly setting up regional headquarters in Singapore, and currently has farms in the U.S. and Canada.
BTC.Top, currently the third largest mining pool, is opening a facility in Canada. ViaBTCthe fourth largest pool, is now creating mining farms in Iceland and America, according to its founders.
Jiang Zhouer, BTC.Top’s founder, revealed he also considered setting up operations in Iran and Russia, but clarified his choice. He stated:
“We chose Canada because of the relatively cheap cost, and the stability of the country and policies.”
Due to the availability of cheap labor and surplus electricity, China has become the source of roughly two-thirds of the network’s hashrate. China’s bitcoin miners, as covered by Core Media, are able to leave the country and set up operations overseas as the potential PBoC crackdown will be gradual.
Last year, China enforced a blanket ban on cryptocurrency exchanges and initial coin offerings (ICOs). The ban took a toll on the industry, and forced various cryptocurrency exchanges to close their doors, leading to a crash in bitcoin’s price. Behind the ban, was PBoC’s claim that cryptocurrencies posed a major financial risk to the country’s economy.
Will China’s bitcoin miners face regulators?
Chinese financial news outlet Caixin, citing an “authoritative source” recently claimed the closed-door meeting between the PBoC and regulators never occurred. Per the publication, China is going to curb preferential treatment bitcoin miners in Chinese provinces currently receive, such as tax cuts and cheap electric power tariffs.
However, the country recently reiterated its aversion for bitcoin. The People’s Daily, China’s biggest newspaper group and the communist party’s official newspaper, recently published a piece stating the cryptocurrency is a bubble. Its price, the piece claims, is based on hype, speculation, and mystery.
Recently the co-founder of BTCC, a bitcoin exchange that served Chinese traders between 2011 and 2017, revealed he believes China’s cryptocurrency exchange ban will eventually be lifted. Per his words, “nothing is ever permanent,” and it is possible the country might “reinstitute and license” exchanges.