Sichuan takes lenient stance on bitcoin mining amid national crackdown to deal with rainy season’s excess hydropower

Sichuan has told bitcoin miners they have until September to leave the province, allowing them to take advantage of the region’s abundant summer hydropower

A recent bitcoin crackdown in China comes amid concerns about volatile prices and energy consumption as the country tries to meet ambitious emissions goals

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A bitcoin miner inspects a malfunctioning mining machine during his night shift at a mining facility in Sichuan on September 26, 2016. Beijing fears the electricity that massive mining facilities consume could hinder the country’s carbon neutrality goals. Photo: EPA

Published: 7:00pm, 7 Jun 2021Updated: 8:59am, 8 Jun 2021

Once the centre of global bitcoin mining, China’s southwestern Sichuan province appears to be dragging its feet on implementing a central government mandate to crack down on the energy-intensive activity as the local government looks to continue reaping the benefits of its excess hydropower.

The provincial energy regulator held a meeting last week with power companies, but it did not result in any conclusions about changing existing policies, according to local media Cailianshe. However, mining companies have been told to prepare to leave the province by September, Beijing-based news site TechNode reported last week, citing people familiar with the matter.

Sichuan’s response to changing signals from Beijing is in stark contrast to harsh measures taken in the northern region of Inner Mongolia, which relies heavily on coal for electricity production, as China focuses its attention on the country’s ambitious carbon neutrality goals.

Between January and April, the region shut down 35 mining companies, potentially cutting annual power consumption by 5.2 billion kilowatt-hours, equal to 1.6 million metric tons of coal, according to the Xinhua News Agency.

A bitcoin “mine” with a blue tin roof sits next to a hydroelectric power plant in Ngawa (Aba) Tibetan and Qiang Autonomous Prefecture, Sichuan province, on September 27, 2016. Beijing is cracking down on energy-intensive mining activities, but Sichuan could let the booming industry take advantage of excess hydropower over the summer. Photo: EPA

Baotou, the largest city in the region, called on citizens to report illegal mining operations, especially mining farms disguised as data centres to get tax, land and power price deductions, the local government said in a notice posted to its website on Wednesday.