Beijing, China has intensified its efforts in the field of cryptocurrency mining as part of a comprehensive energy conservation plan.
In a recent government announcement, the Beijing Municipal Development and Reform Commission, in collaboration with 11 other government departments, has introduced a revised plan aimed at bolstering energy conservation measures. The central focus of this plan is to “firmly eliminate virtual currency mining operations within the city” in compliance with prevailing laws and regulations.
This reform underscores the importance of achieving a “higher level and higher quality” of energy conservation to ensure the safe, stable, and efficient functioning of the city’s energy infrastructure. Additionally, Beijing authorities are tasked with “rectifying” cryptocurrency mining activities through enhanced monitoring, in-depth analysis, and a systematic approach to addressing mining-related issues.
Online investigator WuBlockchain shared on platform X, “Beijing, China, is intensifying its efforts to monitor and analyze cryptocurrency mining activities in the year 2024.”
Beijing Cracks Down Harder on Bitcoin Mining
In September 2021, China took decisive action to intensify its crackdown on cryptocurrency mining, going so far as to declare all financial transactions involving cryptocurrencies illegal. This crackdown was initiated in the context of China’s central bank conducting trials of its own digital currency, known as the digital yuan.
The consequence of this comprehensive ban led Bitcoin miners to disperse towards Western countries, with a notable concentration in the United States for establishing their mining operations.
Nevertheless, this recent crackdown on cryptocurrency mining stands out for several significant reasons. Firstly, China has been grappling with a severe power crisis, a critical resource essential for the cryptocurrency mining process. The nation faced its most significant energy shortage in a decade, with power shortages affecting numerous provinces in both 2021 and 2022, as documented by the Centre for Research on Energy and Clean Air.
Furthermore, Beijing has explicitly conveyed that cryptocurrency mining undermines its ambitious climate objectives, which include achieving carbon neutrality by the year 2060. Government spokesperson Meng Wei has openly criticized bitcoin mining, denouncing it as an “extremely harmful” practice and pledging to enforce even stricter regulatory measures.
In other parts of the world, various jurisdictions are actively taking steps to enhance transparency in energy consumption, responding to the growing impact of cryptocurrency mining on power resources. A notable example is the United States government, which has recently initiated “emergency” checks on crypto mining facilities to address the heightened energy demands during the winter season.
In January, the U.S. Energy Information Administration (EIA) submitted a letter to the Office of Management and Budget, urging an emergency review and clearance for assessments of cryptocurrency mining operations. Joseph F. DeCarolis, the administrator of the EIA, explained the rationale behind this move by stating, “The price of Bitcoin has surged approximately 50% in the last three months, and higher prices encourage more crypto mining activity, consequently increasing electricity consumption.”
He further emphasized the necessity of this proposed emergency survey, highlighting its importance in enabling the EIA to fulfill its mission of providing timely data collection for the purpose of supporting informed policymaking, fostering efficient markets, and enhancing public understanding of the relationship between energy, the economy, and the environment.