In brief

  • Inner Mongolia intends to shut down Bitcoin mining operations.
  • Experts agree that this will force miners to look for better pastures.

The government of Inner Mongolia in China has published a proposal encompassing regulatory measures aimed at helping the region reduce energy consumption, such as closing down Bitcoin mining farms.

These measures are part of China's commitment to "carbon neutrality," which the Communist-led country assumed at the United Nations General Assembly in 2020. Within this scope, the region aims to reduce the energy consumption growth to about 1.9% in 2021.

The draft plan by the Inner Mongolia Development and Reform Commission was released last week and says that all cryptocurrency mining projects active in the region should be shut down by the end of April 2021. The document has a public consultation period until March 3.


Known for its cheap energy, Inner Mongolia is home to large coal mines and historically has been attracting numerous Bitcoin mining operators. Along with Sichuan and Xinjiang, it is one of the largest regions in China with cryptocurrency mining farms, and should the proposal go through, it could impact the entire sector.

According to a study by local reporter Colin Wu, the primary task of achieving carbon neutrality is to reduce the use of coal-based thermal power. This means that using thermal power mining will incur increasing costs and more mining equipment will be transferred to the regions of Sichuan and Yunnan where hydropower is the main source of energy.

“There will be less and less stable mining power in mainland China throughout the year, and many large miners have begun to go overseas,” writes Wu pointing to Texas and Kazakhstan as possible destinations for miners.

According to the Bitcoin Electricity Consumption Index, in 2020 China accounted for 65% of the network’s global hash rate—the amount of computing power mining Bitcoin. Within the country, Xinjiang and Sichuan are the two largest spots for miners (35.76% and 9.66% of global Bitcoin hash rate respectively) followed by Inner Mongolia with 8.07% of total computing power.

Wu’s opinion is largely shared by Edward Evenson, director of business development at Braiins, the operator of Slush Pool. According to him, banning mining activities in Inner Mongolia shouldn't have a significant impact on network hash rate since miners will simply find new homes for their devices–either in another province in China or in the EU or North America.


“It also means that a higher percentage of mining in China will likely be done with renewables, as miners in Inner Mongolia primarily use coal. With the rainy season beginning in May, many of the miners in Inner Mongolia would be moving to Sichuan around that time anyway,” Evenson told Decrypt.

This is not the first time when the government of Inner Mongolia has attempted to restrict cryptocurrency mining activities in the region. Last year, the region’s Department of Industry and Information Technology moved to strip as many as 21 Bitcoin mining companies, including Bitmain, of electricity subsidies. And while this hasn’t resulted in a massive exodus of miners, with the plans to ban mining operations, the sector’s overall landscape is likely to go through some sort of transformation.

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