China's Inner Mongolia Intensifies Crackdown on Cryptocurrency Miners

Listed on the 'Blacklist' May Face Various Social and Economic Disadvantages
Carbon Neutrality Goal by 2060... Regulatory Stance on 'Electricity Waste' Mining Projects Expected to Continue

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] In China, if caught 'mining' virtual currency, individuals may be placed on the 'social credit blacklist' and face various sanctions such as being prohibited from boarding airplanes or high-speed trains.

According to CNBC on the 25th (local time), the government of the Inner Mongolia Autonomous Region recently announced various regulatory measures to prevent virtual currency mining activities. The measures include warnings that strong punishments will follow for a wide range of activities related to virtual currency mining in the future.

Particularly notable is the plan to place individuals and companies involved in virtual currency mining on a 'credit delinquency list' (blacklist).

China currently operates a 'social credit' system, which extends the financial credit evaluation system to all social sectors for individuals and companies. Accordingly, major cities in China score individuals and companies based on their social credit ratings. Individuals or companies who engage in 'good behavior' such as blood donation, volunteering, and social contribution activities receive bonus points, while those who commit 'bad behavior' such as jaywalking receive penalty points.

Individuals or companies with good social credit records are placed on a 'red list' and receive preferential treatment, but those with poor credit records who end up on the 'blacklist' face social and economic disadvantages such as restrictions on purchasing high-speed train and airline tickets.

Furthermore, the Inner Mongolia Autonomous Region emphasized that not only individuals or legal entities directly involved in virtual currency mining but also public officials who provide various support or protection to them will be strictly punished by being placed on the blacklist.

Computer used for cryptocurrency mining
[Image source=Reuters Yonhap News]

Additionally, industrial complexes, data centers, and power companies that provided business locations and electricity to virtual currency mining sites may be excluded from government subsidies and face business disadvantages if they intentionally omit reports or fail to shut down mining sites in a timely manner. Moreover, internet companies and telecommunications companies that engage in or support virtual currency mining may have their business licenses revoked.

Officials who use their authority to provide various conveniences to virtual currency mining sites will be uniformly sent to the party's disciplinary inspection agency and prosecutors for punishment, the warning stated.

The Inner Mongolia Autonomous Region is the most proactive among Chinese local governments in cracking down on Bitcoin mining sites. Earlier, the region announced a policy to expel all virtual currency mining sites within its jurisdiction by April this year and recently launched a dedicated reporting network to conduct a large-scale search for mining sites.

This measure aligns with the Chinese government's intention to completely eliminate virtual currency mining following the ban on virtual currency transactions such as Bitcoin. In particular, given the Chinese government's declaration to achieve a carbon-neutral society by 2060, it is interpreted that they have determined that the virtual currency mining business, which causes electricity waste, cannot be allowed to continue.

Earlier, on the 21st, the State Council of China held a meeting of the Financial Stability and Development Committee chaired by Vice Premier Liu He, stating, "By cracking down on Bitcoin mining and trading activities, we must firmly prevent individual risks from spreading to the entire society."

Currently, China accounts for 65% of the world's virtual currency mining volume.

This content was produced with the assistance of AI translation services.