Tomorrow, crypto mining within Inner Mongolia is banned. Xinjiang expects to follow with Chinese crypto miners moving into green energy or migrating overseas in response to China's actions.
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Overview
Inner Mongolia, previously a hotspot for crypto mining, has announced a ban on it that will become active tomorrow, prompting crypto miners in the province to shut down or move on/out. Beijing is looking at suppressing China's crypto mining is viewed as highly pollutive with low returns in areas like Inner Mongolia that is taking action by tomorrow. Other provinces will possibly be affected soon, such as Xinjiang mentioned earlier.
Chinese crypto miners, who are becoming stressed under new restrictions, are looking for alternatives to continue their business. Mainly they are taking two options: stay or leave. Those who stay are considering ways in which to change their business according to the arising regulations. They need to think about is how to respond without a significant impact on the profits they make and how they run. One option businesses have is turning to renewable energy (e.g. solar energy). This option means that not only will they abide by new Chinese regulations, but they will also become more sustainable and most likely earn more over the long run from the fact that they have cheaper energy bills. As for those who leave, it is self-explanatory. They are against the new regulations in terms of their business and are moving over to new areas that give more potential.
What is important to consider is the sheer dominance of Chinese crypto miners: 65% of the global hash rate is provided by Chinese crypto miners.
Promise To Be "Carbon-Neutral"
China has made an audacious promise to become "carbon-neutral" by 2060. What this means is that the carbon released by China into the atmosphere is about equal to the amount of carbon soaked by plants, the ocean, et cetera. This brings the amount of excess carbon way down, especially with China being the most, if not one of the most, biggest contributors to carbon emissions in the world.
Since crypto mining has a massive issue in carbon emissions, soaking lots and lots of energy, most of which are fossil fuel-based, to run hashing power, China would be frowning at crypto mining with its aim of being carbon neutral. This is evident with the introduction of harsher regulations, crypto mining companies required to abide by the Chinese government.
President Xi Jinping pledged at the 2019 UN General Assembly for China to stop the increase of carbon emissions by 2030 with carbon neutrality coming 3 decades later at 2060. The pledge indicates that harsher action on crypto mining in China is much more sooner than previously mentioned, essentially all carbon emissions in China cut by 2030, or as the pledge says.
Wang Wenguang, head of Bitdeer's mining data centre, said:
Carbon neutrality is indeed a significant policy factor, and in the short term, as you’ve already seen, it’s mainly impacted Inner Mongolia. After the crypto ban in Inner Mongolia, no large-scale crypto-mining firms will be there anymore. Even though Xinjiang has not been affected by carbon neutrality currently, I believe, as this policy continues to push, Xinjiang will certainly face the same problem as Inner Mongolia.
Further Reading
For more on Chinese crypto miners with climate goals where the main information was received, click here.
For more on renewable energy and crypto, click here.
For more on China's actions on crypto, click here.