Chinese government closes mining farms in Xinjiang province

The autonomous Chinese province of Xinjiang is starting a hunt for mining farms that do not have a license for this activity. All illegal cryptocurrency mining operations must be identified and suppressed by the end of August.

In recent years, the Chinese province of Xinjiang has aroused great interest among miners due to its cheap energy resources. Last year, many companies sought to locate mining facilities there. However, the mining paradise in the region is now facing closure.

A senior official from the Xinjiang Economic and Information Commission (EIC) confirms that the agency has issued a notice to local utilities in Xinjiang Uygur. The government document instructs to stop large-scale mining by August 30 of this year and report on closed mining farms. The notice was prepared by the EIC division responsible for the problems of the public sector in the region.

The document focuses on unlicensed mining operations. The EIC identifies unauthorized Bitcoin farms that are not licensed or have contracts with local electricity companies to be shut down. A report on progress in closing such mining farms must be submitted by utilities to the EIC. 

This is not the first government repression against mining in the country. This policy is inconsistent with the Chinese government's recent announcement of a decision to once again allow cryptocurrency deposits and withdrawals to be processed by the country's major exchanges and the announcement of the development of regulatory legislation for cryptoasset trading by the People's Bank of China.

The move to pursue two seemingly opposing lines of regulation indicates the Chinese government's future stance on cryptoassets. It is likely that the government will develop those areas of the cryptocurrency industry that it can control and make a profit. And decisively limit those technologies that could undermine China’s ability to tightly centralize and regulate the country’s economy.