Chinese miners are facing serious difficulties in paying electricity bills, reports journalist Colin Wu. The measures by authorities against cryptocurrency exchanges as part of the fight against money laundering.
As the Chinese government is cracking down on the exchange of crypto and legal currency, Chinese miners are facing a major problem in paying electricity bills. 74% of the miners surveyed told Wu that the payment of electricity bills has been greatly affected. pic.twitter.com/Sqi8DkP5zb
— Wu Blockchain（Chinese Crypto Reporter） (@WuBlockchain) November 16, 2020
Earlier, Chinese authorities launched a campaign to cut off banking services for local off-exchange cryptocurrency traders, blocking their accounts, bank cards and closing access to online banking.
According to Wu, traders have stopped withdrawing funds in yuan. However there is a category of digital asset sellers for whom the national currency is essential—the miners. To pay electricity bills, which account for a large share of their costs, they need fiat money.
Survey results from the local industry community showed that 74% of miners faced difficulties in paying. Some were forced to halt equipment, unable to obtain yuan for cryptocurrency.
A number of off-exchange traders that specialized in servicing miners also ceased operations.
Colin Wu believes this will accelerate the exodus of miners from the country to the United States, Kazakhstan and other jurisdictions with friendlier regulation.
Arcane Research noted that the share of Chinese miners in Bitcoin’s hashrate is declining due to capacity additions in other countries, including the United States and Kazakhstan.
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