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| Bitcoin spikes after Inner Mongolia declares war on mining |
Inner Mongolia, an autonomous region in northern China, has banned cryptocurrency mining.
Inner Mongolia's announcement that it will complete all of these projects by April has raised concerns that the world's second largest economy will take more measures this year to eliminate energy consumption.
According to the draft plan published on the Inner Mongolia Development and Reform Commission website on February 25, the autonomous region has become the preferred region for industry due to cheap energy, and new digital currency projects have also been banned.
The move aims to limit growth in energy consumption to around 1.9% by 2021.
The statement raised concerns about an industry that has been campaigning for several years in China to contain speculative bubbles, fraud and wasting energy.
The draft directive was released weeks after China's leading economic planner, the National Development and Reform Commission, criticized Inner Mongolia as the only province that did not control energy consumption in 2019.
According to the draft plan, the current goal for the region is to reduce emissions per unit of GDP by 3% this year and control the increase in energy consumption by about 5 million tons of standard coal.
Bitcoin profits were reported to have increased 5.1% to $ 47,559 on Monday.
For the first time in 2018, Chinese officials confirmed a proposal to stop the depletion of energy-consuming digital currencies.
Inner Mongolia is home to large coal mines and is known for its inexpensive energy sources. In the past few decades, investment has been made in several energy-intensive industries such as aluminum smelting and iron alloys.
According to the Bitcoin Energy Consumption Index compiled by the University of Cambridge, the region accounts for 8% of Bitcoin's global mining computing power.
Thanks to cheap electricity, local chip manufacturers, and cheap labor, China typically owns more than 65% of the total electricity grid.
Since 2017, Beijing has canceled the initial issuance of tokens and restricted the flow of virtual currency within its borders, forcing many platforms to withdraw from the domestic market. This removal brings back people's old fears.
The country was once home to nearly 90% of the trade and had the largest share of the mining industry. Since then, major players (such as Bitmain Technologies) have fled abroad.