Inner Mongolia Government Announces Total Ban on Mining
Possibility of market shock due to shortage of cryptocurrency supply
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Inner Mongolia (Neimungu) of China, which has been referred to as’the sacred place for bitcoin mining’, completely bans bitcoin mining, which is expected to shock the cryptocurrency market.
According to Bloomberg News on the 2nd, the Inner Mongolia government announced in its official gazette on the 25th that it would completely ban bitcoin mining and close all related companies by April. Meanwhile, bitcoin mining companies flocked to Inner Mongolia because of cheap electricity, and accordingly, the nickname of’the sacred place for mining’ was created. It is estimated that in Inner Mongolia alone, about 8% of the world’s bitcoins are mined.
Bloomberg said that the Inner Mongolia government has been reprimanded by the central government of China for such hard action. It is known that the central government of China condemned Inner Mongolia as the only province that failed to meet its energy consumption targets last year.
The Chinese government has banned the mining and trading of private cryptocurrencies such as bitcoin since 2017 due to problems with monetary policy. However, in fact, they are on the lookout. Accordingly, 65% of the world’s mining volume is still underway in China.
Bitcoin miners continue to mine negatively in China because of China’s cheap electricity and labor costs, and loose crackdowns. The Bitcoin miner manufacturing industry is also virtually monopolized by China, with three major Chinese manufacturers, including Kanan, dominating 90% of the global market.
Inner Mongolia’s measures are likely to spread throughout China. Concerned about the economic overheating this year, the Chinese government is curtailing overinvestment. In particular, China is expected to strengthen its distance to private cryptocurrencies as it is set to release the legal digital currency’digital renminbi’ next year.
Bloomberg predicted that “the Chinese government’s hard line of policy could make the bitcoin shortage worse and shock the market.”
/Beijing = Correspondent Soomoon Choi [email protected]
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