China’s Hebei Province Begins Crackdown on Crypto Mining and Trading, Reports Reveal – Regulation

Authorities in China's Hebei province have reportedly launched a campaign against cryptocurrency mining and trading. According to a cited announcement from the region's Cyberspace Administration, several government agencies are working together to prevent the use of the region's computing power for the crypto activities that the government considers illegal.

Cyberspace Watchdog targets crypto mining and trading operations in Hebei

Hebei province in northern China is the latest Chinese region to take measures to curb cryptocurrency mining and trading, media reports have revealed. South China Morning Post (SCMP) wrote that the Regional Cyberspace Administration has launched a campaign against cryptocurrency mining and trading, citing various reasons ranging from environmental and financial concerns to national security considerations.

Government agencies and state-owned enterprises in the province surrounding Beijing have been asked to review their information systems and stop all use of their computing power to mint digital coins by the end of September, the newspaper said. Additionally, local universities and research institutes have been directed to reduce the capacity of such systems to meet only their academic needs.

According to a report by state-controlled broadcaster CCTV, as published by Sina, Hebei's Internet and Telecommunications Bureau has teamed up with the provincial departments of education, public security, financial supervision and communications, and the Shijiazhuang branch of the People's Bank of China, among others, to carry out the "rectification actions against virtual currency mining and trading activities."

Chinese crypto journalist Colin Wu, also known as “Wu Blockchain” on Twitter, broke the news on social media on Tuesday, linking to a Wechat post.

On September 14, China's Hebei province announced that it would begin checking and cracking down on cryptocurrency mining starting in October. https://t.co/zij82HQiKR

— Wu Blockchain (@WuBlockchain) September 14, 2021

“Cryptocurrency mining consumes a huge amount of energy, which violates China’s ‘carbon neutral’ goal,” Hebei’s Cyberspace Administration said quoted from Reuters as an indication. “The exchange and transaction greatly disrupt the country’s financial order and the financial risk is high,” the agency added, according to SCMP. The spread of virtual currencies, the watchdog warned, will harm economic and social development in the People's Republic and threaten its national security.

After the current campaign ends on September 30, government authorities in Hebei will continue to monitor the situation regularly and impose penalties on those who illegally mine and trade digital currencies starting in October. The provincial cyberspace administration also said that internet and financial regulators should improve the collection of reports from the public on such cases.

China banned cryptocurrency trading back in 2017, but authorities in Beijing only directly intervened in cryptocurrency mining earlier this year. In May, the State Council, the cabinet of ministers, announced a crackdown on crypto-related activities after President Xi Jinping pledged that the country would achieve carbon neutrality in the next four decades.

The government offensive has already impacted mining operations in a number of provinces including Sichuan, Xinjiang, Qinghai, Yunnan, Inner Mongolia, and Anhui. Gansu, in northwest China, launched its crackdown last week. In July, the province received a crypto mining facility closure notice from the State Grid Corporation of China.

Do you think China will maintain its current policy towards the crypto industry in the future? Tell us in the comments section below.

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