Bitcoin Miners’ Power Usage May Be Regulated By China’s Central Bank

News, Regulation | January 4, 2018 By:

The People’s Bank of China (PBoC), the country’s central bank, is reportedly planning to regulate the use of electricity for bitcoin mining.

The central bank recently had a closed-door meeting with members of the Leading Group of Beijing Internet Financial Risks Remediation to discuss how to regulate bitcoin mining. The PBoC reportedly told the members to ask local governments to regulate the power usage of bitcoin miners to gradually reduce the scale of their production, according to CNBC, citing an unnamed source.

“Governments at all levels were asked to clarify the location and numbers of bitcoin miners and report relative information to the monetary authority,” the source said.

The source added the PBoC is concerned that bitcoins mined using local resources do not contribute to the mainstream economy, as most of them are sent to foreign countries. The central bank doesn’t plan to shut down mining farms, but to impose limitations on power usage.

China is home to many of the world’s massive mining farms, including Antpool, Bixin, BTCC, and F2pool. The country’s cheap electricity keeps local miners at peak efficiency and allows them to outlast their foreign competitors. Chinese mining pools control more than 80%. of the bitcoin network’s collective hashrate.

In September, the central bank closed local cryptocurrency exchanges and banned initial coin offerings (ICO) with the aim of containing financial risks. The proposed regulations on power usage, if implemented, will target small-scale mining farms.