The Chinese Province of Inner Mongolia has banned cryptocurrency mining, becoming the first region in the country to take such drastic steps. According to the authorities, all mining farms will be closed by the end of March to reduce the stress on the local power grid. This has unsurprisingly raised fears of further restrictions on mining among the numerous miners in the country.
Inner Mongolia is known for its aluminum smelting and ferroalloy industry which along with cheap electricity has seen a huge spike in investments aimed at energy-intensive ventures. The low cost of electricity has also resulted in the appearance of tons of cryptomining farms, tanking the energy consumption of the region.
The Inner Mongolian region of China accounts for 8% of the global Bitcoin mining computing power, as per the Bitcoin Electricity Consumption Index. China overall accounts for over 65% of the network’s total, with its lucrative combination of inexpensive electricity, local chipmaking factories, and cheap labor.
Inner Mongolia was the only province that failed to control its energy consumption in 2019. According to the new draft plan, the region now aims to limit the growth of energy consumption to just under 2% in 2021. There are also plans to restrict the emissions per unit of gross domestic product by 3% this year and limit incremental growth of energy consumption to about 5 million tons of standard coal, according to the draft plan. The region will also invest in renewable energy with the goal of installing more than 100 gigawatts of renewable generation capacity by 2025.