China considers tough penalties for Bitcoin mining

Inner Mongolia, China, is considering imposing sanctions on companies and individuals involved in cryptocurrency mining activities, as part of the implementation of proposals aimed at more strict measures against these activities.

Chinese Vice Premier Liu He said last week that it was necessary to "crack down on Bitcoin mining and curtail trading activities".

According to CNBC, the comments are seen as Beijing's intentions to continue a four-year campaign to curb Bitcoin trading and other activities related to cryptocurrency mining.

The draft Inner Mongolia Region proposals target companies such as telecommunications and internet companies involved in virtual currency mining activities.

And the Inner Mongolia Development and Reform Commission has warned against revoking the licenses of these companies if they are proven to be involved in cryptocurrency mining activities.

The proposal includes canceling preferential government support policies granted to cloud computing companies and data centers, as well as imposing penalties on individuals involved in money laundering via digital currencies.

Inner Mongolia is an autonomous region located in the north of the People's Republic of China, with an area of ​​1.183 million square kilometers, equivalent to 17% of the area of ​​China.

Inner Mongolia's hard-line stance on mining began last March after it announced its plans to ban new cryptocurrency mining projects and close existing activities with the aim of reducing energy consumption.  

Cryptocurrency mining units use purpose-built computers that solve complex mathematical equations that effectively allow a Bitcoin mining transaction to occur.

Computers consume very large amounts of electrical energy, as mining one Bitcoin consumes about 112.57 terawatt / hour of energy annually, which is equivalent to the consumption of more than an entire country such as the Philippines and Chile of electricity, according to the Cambridge Bitcoin Electricity Consumption Index, which is an affiliated project. For the University of Cambridge.

China alone accounts for 65% of Bitcoin mining activities in the world, while Inner Mongolia alone accounts for about 8% globally due to its cheaper energy prices, a larger share than that allocated to the United States.

China's strict stance on cryptocurrencies is not new, it was closed by local cryptocurrency exchanges in 2017, and in the same year, it banned so-called Initial Coin Offerings (ICOs).

However, traders continued to operate despite the outward trade in.

Inner Mongolia's proposals come as China tries to go green, with President Xi Jinping saying last year that his country aims to reduce carbon dioxide emissions by 2030.

The energy consumption of Bitcoin mining operations returned to the spotlight earlier this month after Tesla CEO Elon Musk said the major electric car maker would stop accepting digital currency to buy the cars it produces, citing environmental concerns about widespread mining. Cryptocurrencies. 

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