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The move by Inner Mongolia to curb its crypto mining operations stems from Beijing’s concerns about the region’s inability to meet up with energy efficiency standards.
Inner Mongolia, a region in Northern China, is set to stop all of its crypto mining operations in order to pursue Beijing’s energy efficiency demands. As reported by CNBC, the Bitcoin (BTC) mining hub will stop the approval for new digital currency mining farms to be established while shutting down existing ones.
Bitcoin and other cryptocurrency mining operations are known to consume a large amount of energy, making the venture, a not so government-friendly one. The mining activities involve an array of sophisticated and specialized machinery and computers that work in tandem to solve complex mathematical problems. These solutions are needed to confirm or validate BTC transactions, earning the miners the corresponding digital currency in return.
According to the Cambridge Bitcoin Electricity Consumption Index, a project of the University of Cambridge, Bitcoin mining is known to consume as much as 130.90 terawatt-hours of energy per annum, a figure that dwarfs the energy consumption of Nations like Argentina and Ukraine.
China’s dominance in cryptocurrency mining operations is well acclaimed. The Asian giant accounts for as much as 65% of all Bitcoin mining around the world, with Inner Mongolia taking a huge 8% of this figure, thanks to its cheap energy provisions. The United States of America in contrast accounts for just about 7.2% of global BTC mining operations.
Basis for Crypto Curb of Inner Mongolia
The move by Inner Mongolia to curb its crypto mining operations stems from Beijing’s concerns about the region’s inability to meet up with energy efficiency standards. Per the CNBC report, the region’s failure to measure up to the benchmarks has stirred reprimand from the capital since 2019, and in response, Inner Mongolia’s development and reform commission laid out plans to reduce energy consumption.
These plans featured the clampdown on existing Bitcoin mining farms while disallowing the emergence of new ones. Besides crypto mining, however, the region is set to overhaul other energy-intensive activities within its shores including the steel and coal industries respectively.
China’s deep-rooted heritage in Bitcoin and other altcoin mining activities may take much more than Inner Mongolia’s moves to curb. Though there are earlier reports that suggest China will not be banning crypto mining, in pursuant of its target to see peak carbon dioxide emissions by 2030 and carbon neutrality by the year 2060, the Chinese government may roll out regulations that will generally reduce crypto mining activities in the coming months, or years.
Inner Mongolia’s shutdown is expected to kick off by April of this year, and all eyes will be on the other region, as to whether to follow a similar path or not.