Key Insights:
- Beijing implements revised energy conservation plan with a focus on cracking down on cryptocurrency mining.
- The Beijing Municipal Development and Reform Commission and 11 other departments lead the effort.
- Crypto mining activities to be “resolutely cleaned up” to align with laws and regulations.
- China’s power crisis and commitment to carbon neutrality drive the intensified crackdown.
- Beijing’s measures signal a more focused and rigorous approach compared to previous broad anti-cryptocurrency measures.
Detailed Summary:
Beijing has taken significant steps to strengthen its energy conservation efforts by implementing a revised plan with a specific focus on curbing cryptocurrency mining activities. The Beijing Municipal Development and Reform Commission, in collaboration with 11 other departments, has issued a detailed notice outlining measures to crack down on virtual currency mining in alignment with laws and regulations.
The plan underscores the commitment to a dual control system of energy consumption and carbon emissions, emphasizing a transition to a “higher level and higher quality” of energy conservation. Unlike previous broad anti-cryptocurrency measures in China, these directives represent a more granular and targeted approach, particularly aimed at reducing pollution, promoting green expansion, and fostering technological and energy innovation.
Under item 18 of the plan, authorities will strengthen monitoring, analysis, and classification rectification of mining activities to “resolutely clean up virtual currency ‘mining’ activities.” This move aligns with China’s national directives to reduce the environmental impact of crypto mining and align with the nation’s goals of energy efficiency and carbon neutrality.
The crackdown on crypto mining in Beijing is notable for its focus on the excessive energy consumption associated with these activities. The city’s measures represent a shift towards a more focused and rigorous approach, likely pushing mining operations underground or offshore.
The intensified crackdown can be attributed to China’s power crisis, experiencing its worst energy shortage in a decade. Additionally, Beijing is committed to achieving carbon neutrality by 2060, and crypto mining has been identified as an obstacle to these aggressive climate targets. Government spokesperson Meng Wei has labeled bitcoin mining as “extremely harmful,” vowing for stricter enforcement measures.
In the global context, the U.S. is also taking proactive measures to scrutinize the power consumption of cryptocurrency mining facilities. The U.S. Energy Information Administration (EIA) has initiated ’emergency’ checks on crypto power usage to address concerns over the ecological footprint of mining activities. This move aims to inform regulatory discourse on energy use transparency as the digital currency industry matures.
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