Regulation News

China’s Hainan Province carries out crackdowns targeting active crypto miners

TL;DR Breakdown

  • The Hainan Province of China takes steps aiming to curb crypto mining.
  • The province plans to introduce higher power rates for the organizations that continue to mine crypto there.

China’s crypto ban looks to be taking shape as it reaches even the most remote areas like Hainan. This province is the smallest one in the country, and it is also the southernmost one. It is conducting a crackdown to note all remaining crypto miners and slap them with high electricity rates.

In September 2021, China said that crypto mining and other related activities are under a blanket ban. Now, the remaining miners may face very high electricity rates soon enough.

Per the Hainan authorities, this province is moving to introduce differentiated tariffs for electrical charges. They said these bans are crucial for a major plan to reduce its carbon footprint.

Hainan plans to charge crypto miners more money for power consumption

The new electricity charges are looking to charge the crypto miners in Hainan at a rate of 0.8 yuan ($0.12 ) per kWh of electricity. While these will be the news rates, they will only apply to the miners since the Southern Power Grid will maintain the 0.6 yuan ($0.09) per household kWh.

The province went ahead to clarify that miners should not participate in their power exchange program whatsoever. This scheme is shutting its doors on miners, but there is no specific time for this occurrence to happen. Additionally, the regulator has also said that they will enforce the supervision of the government over these activities.

China’s crypto ban continues

China has had a very tough journey with imposing crypto bans in its area of jurisdiction. It is also known for its hate towards digital assets. However, it now uses a digital yuan similar to crypto.

The anti-crypto campaign began in 2013 when the PBOC said that the virtual currencies lack backing and are valueless. However, the bank did not stop anyone from trading cryptos, but it advised them to be wary of what they chose to do. Despite not banning the cryptos directly, the PBoC met with BTCC exchange which allegedly made the exchange reject yuan deposits. These developments made the value of BTC fall.

In 2017, many developers announced new projects, and many saw it as an opportunity since the older coins were already successful. These developers were conducting ICOs, which now became a target for scammers. Some did fake projects and took investors’ money, never to be heard from again. These occurrences made many authorities react, and the Chinese government said that ICOs are illegal there.

In April 2019, China’s NDRC said that BTC is undesirable and local governments should do away with it altogether. This report sent shivers down the spines of Chinese crypto-enthusiasts since, by 2019, half of BTC nodes were there. However, not much happened, but it was a sign of a greater war ahead.

The following year had more authoritarian developments as the government announced tighter regulations on exchanges. The PBoC also said it would block 100 external websites offering crypto services. However, it was not until 2021 that this ‘war’ reached its climax. Rigid rules came bit by bit, leading to the effective blanket ban in September. This ban is going on even with small provinces like Hainan enforcing it.

This post was last modified on December 6, 2021 6:36 am

Edith Muthoni

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, cryptocurrencies, blockchain, and cryptocurrency investments.

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