Regulators in the Chinese autonomous province of Inner Mongolia are reportedly going to start inspecting cryptocurrency mining firms to “clean-up” the crypto mining industry.
According to a report published by the Global Times, regulators in Inner Mongolia are tightening their grip on cryptocurrency mining firms and are looking to “combat chaos in the industry.” Its targets in the inspection are going to be mining firms “whose business is irrelevant to the real economy.”
The local government’s regulators are also going to be cracking down on companies “that enjoy preferential government policies involving local electricity rates, land and taxes by pretending to be a participant in the big data industry.”
As CryptoGlobe reported, back in September Chinese authorities warned five ministries in the autonomous province to clean up cryptocurrency mining, which is heavily regulated under local laws. The warning referred to it as a “pseudo-financial innovation” that exists outside the regular economy that shouldn’t be supported.
China itself was close to banning cryptocurrency mining earlier this year, before the country’s president openly showed support for blockchain technology. The instability seems to have already taken a toll, however, as Yang Wang, a senior research fellow with the Fintech Institute of Renmin University said:
Most people I knew who worked in the domestic crypto token industry have already shifted their businesses to Southeast Asian countries like Singapore. They felt that the crypto token market has come to an end in China.
Wang added he believes cryptocurrency miners in change may shift their focus to “support blockchain research and applications” if the government does crack down on their operations.
It’s worth pointing out Bitcoin was earlier this month presented as the “first successful application of blockchain” to 1.4 billion people as Chinese state news agency Xinhua published a lengthy front-page article on it.
Featured image by Adolfo Félix on Unsplash.
