The Chinese authorities plan to impose restrictions on the use of electricity by the cryptocurrency miners, Bloomberg reports with reference to trusted sources.
According to the anonymous sources, the plan for limiting the supply of electricity to miners was presented by the People's Bank of China at a closed meeting held on Wednesday.
The Chinese authorities are concerned that miners abuse the low cost of electricity in a number of regions of the country, which in some cases violates the standard approach of electricity use, sources note.
In this connection, the regional authorities were instructed to study the situation with high electricity consumption by industry representatives.
Other regulators turned attention to this sector, including the National Development and Reform Commission of the People's Republic of China (NDRC).
In China, there are a lot of large farms for Bitcoin mining, which use huge computing power that requires considerable energy consumption.
According to the Digieconomist, Bitcoin Energy Consumption Index, global mining capacity consumes as much electricity as 3.4 million homes in the US.
The Chinese government is taking a tough stance on the cryptocurrency market. In September 2017, the government imposed a ban on initial coin offerings (ICOs) and forbidden the local crypto exchanges.
The price of Bitcoin, which has risen 15 times over the past year, is currently trading at $ 14,748, which is almost unchanged from the level of the previous session.
Elsewhere, two leaked documents seem to confirm the story of Bloomberg’s sources. According to the documents, the Leading Group of Internet Financial Risks Remediation, China’s primary internet finance regulator, has required regional governments to put pressure on Bitcoin miners so that they would accept an “orderly exit” from the business.
One of the leaked document, which dates from January 2, says:
“Currently, there are some so-called ‘mining’ enterprises that produce ‘virtual currencies.’ They have consumed huge amounts of resources and stoked speculation of ‘virtual currencies.’”