China's largest concentration of computing power forced to halt production, Changji Prefecture Development and Reform Commission: All virtual mining companies to suspend production for rectification

According to a report by The Block, the Reform and Development Commission of Changji Hui Autonomous Prefecture in Xinjiang issued a notice to government officials of the Zhunde Economic-Technological Development Park on Wednesday, requesting the officials to shut down all cryptocurrency mining facilities under their management by 2:00 p.m. today (9th).

Xinjiang Mining Industry Shuts Down for Rectification

The area covers 15,500 square kilometers and is the fourteenth largest coal production site in China, with many coal-based power plants and industrial facilities, and is also one of the main gathering places for large Bitcoin mining farms in China.Reports indicate that the latest regulatory notice is based on the decision of the Chinese central government on Bitcoin trading and mining industries last month.

Chinese self-media Wu Blockchain pointed out that among the three major mining areas in China, Inner Mongolia has been completely closed, Sichuan has not yet issued a ban, while the situation in Xinjiang is more complex, with the official document using the term "temporary rectification," which, although prohibited, is not as strict as in Inner Mongolia.

There are three major mining regions in China. Inner Mongolia has completely stopped, Sichuan may not stop, so the situation in Xinjiang is more complicated. The term used in the document is to suspend for rectification, which is not as strict as Inner Mongolia.

— Wu Blockchain (@WuBlockchain) June 9, 2021

However, the impact of Xinjiang's crackdown on the mining industry on Bitcoin has the potential to be more severe than when Inner Mongolia issued a ban last time. The Block reports that although both provinces rely on petrochemical energy, Xinjiang's Bitcoin mining industry is larger in scale than Inner Mongolia's. According to data from the Cambridge University Bitcoin Mining Map, Xinjiang's computing power accounts for 35% of the Chinese region, while Inner Mongolia only accounts for 8%.

Chinese Miners Seek Registration

Bitcoin mining operations in China are tightening, and Chinese miners appear to be seeking registration. Tech magazine "Wired" quoted an anonymous source familiar with China's Bitcoin mining industry as saying that panicked miners, following the release of Chinese policies, have "overnight" moved their mining machines to neighboring countries like Kazakhstan. The anonymous source also claimed that miners who cannot quickly relocate their facilities are planning to close their large mining farms and continue mining in a more dispersed and inconspicuous manner.

Didar Bekbauov, founder of the local cryptocurrency mining service provider Xive in Kazakhstan, stated that over the past two weeks, he has received inquiries from Chinese miners every day, hoping to move to Kazakhstan. Didar Bekbauov said:

"These people are waiting for further policies from the Chinese government, but they are still looking for Plan B to prevent government restrictions or a complete ban on mining in some way."

Additionally, according to previous reports, mining chip manufacturer Canaan will establish its first overseas after-sales service center in Kazakhstan, which may also be related to the trend of China's mining industry relocation.