In the context of the growing size of the cryptocurrency market and the breeding of risk-taking behavior, national regulators continue to try to strengthen the supervision of the cryptocurrency industry. The bitcoin regulatory policy also affects the progress of cryptocurrency mining. Price fluctuations and regulatory policies are still the main obstacles affecting mining. Based on the recent regulation of bitcoin mining in China, we have deeply studied the regulatory policies of several countries with active cryptocurrency mining, hoping to provide reference for miners.
In 2021, all parts of China will be fully cleared and delisted. On May 18, the Inner Mongolia Development and Reform Commission established a virtual currency "mining" corporate reporting platform; on the same day, China Internet Finance Association, China Banking Association, and China Payment and Settlement Association issued the "Announcement on Preventing the Risk of Virtual Currency Trading Hype"; May On the 21st, the Financial Commission of the State Council required to crack down on Bitcoin mining and trading, and resolutely prevent the transmission of individual risks to the social field; on May 26, the Inner Mongolia Development and Reform Commission issued eight measures for resolutely cracking down on virtual currency "mining" behaviors for comments; On June 9, the Qinghai Provincial Department of Industry and Information Technology requested a clean-up and rectification. It is strictly forbidden to initiate and approve various virtual currency "mining" projects in various regions, and to completely shut down all existing virtual currency "mining" projects; On June 12, people from the Yunnan Provincial Energy Bureau confirmed that they organized various power-using departments to conduct joint inspections in a timely manner in accordance with the requirements of the notice, and completed the clean-up and rectification of the power consumption of Bitcoin mining companies at the end of June this year; followed by the Sichuan Provincial Development and Reform Commission and Energy The bureau took further rigorous measures on mining activities and directly cut off the power supply of the mine. With the strengthening of the State Council and local governments, it is only a matter of time before the mines in various regions are fully cleared. China's blockchain mining industry is ushering in a cold winter.
2.The United States
The United States is a federal country, and there is no unified policy on Bitcoin mining. There is competition among states. Therefore, there are always some states that are friendly to crypto mining to become popular candidates for Bitcoin mining. Such as Texas, Wyoming, Florida.
Texas is rich in natural gas, and electricity costs are very low among the 50 states in the United States. The power policy is very flexible. Texas Governor Greg Abbott said on Twitter on May 5, “Texas is becoming a Bitcoin A Holy Land for Miners". However, whether the Texas Power Grid can meet the challenge of providing power to more encrypted miners is still unknown. In February of this year, 69% of Texas residents experienced power outages and about half of them were out of water. According to Buzzfeed, this incident could cause as many as 700 deaths in the state.
As early as January 19, 2019, Wyoming introduced a bill to divide encrypted assets into three categories: digital consumer assets, digital securities, and virtual currencies. Any of these three types of assets are defined as intangible personal property. This means that the state of Wyoming has legislated to recognize virtual currency as an intangible personal asset and put virtual currency and legal tender on the same legal basis. The Mayor of Miami, Francis Suarez, said that Miami’s doors are open to Chinese miners and willing to provide cheap nuclear energy to support mining activities.
Russia's recognition of cryptocurrency is not high. Since it previously regarded cryptocurrency as illegal currency, it has become one of the largest restricted markets for Bitcoin. However, the country's cryptocurrency mining business is very popular.
The single industrial structure, excess energy and steel production, and difficulties in technological transformation are the dilemmas of traditional industrial countries such as Russia. The arrival of Bitcoin has injected new vitality into this traditional industrial country. Bitcoin mining can not only solve the serious local energy surplus. The more critical issue is that the mining industry will bring trillions of rubles in revenue to Russia, which will bring a turn for the sluggish domestic economy. Russia’s climate is also very suitable for mining machines.
Unlike other countries’ attacks on the mining industry, the Russian government has thrown an olive branch to miners around the world, and will legalize cryptocurrency mining in 2020. At the same time, it also supports electricity bills, hardware equipment, and opens up a lot of transportation convenience. And an industrial park that provides 7×24 hours technical support services for its use. With excess energy, abundant hydropower, low temperature environment, and full support of policies, Russia has gradually become the world's most friendly Bitcoin mining mecca.
The mining industry in Kazakhstan is booming. The key factor that makes Kazakhstan a safe place for mining investment is government policy. As a resource country, Kazakhstan regards blockchain technology as the main direction of the country’s digitization and regards encrypted mining as a legitimate business activity and a source of economic growth. And actively promote the legalization of cryptocurrency mining in the country.
In mid-June 2020, a hearing held by the Senate of Kazakhstan revealed for the first time a plan to attract US$715 million in investment in the cryptocurrency mining field. At that time, Kazakhstan already had 14 cryptocurrency mines. At present, the electricity demand of the Kazakhstan Digital Mining Center reaches 500 MW, and the annual electricity bill is 57 billion tenge, and there are 10-15 billion tenge for personnel salaries, construction and equipment procurement. In 2020, the foreign exchange income of Kazakhstan mining services is equivalent to 70 billion tenge, value-added tax is 7.5 billion tenge, and corporate income tax is 2 billion tenge.
On July 1, the President of Kazakhstan Kassym-Jomart Tokayev signed a new law amending the Central Asian Republic’s legislation on "tax and other budgetary obligations", which will affect the use of cryptocurrency mining in this energy-intensive industry. Additional charges are levied on electricity. It is reported that the bill was voted by the Senate in early June, and cryptocurrency miners need to pay an additional fee of approximately US$0.0023 (equivalent to RMB 0.015) for each kilowatt of electricity used. After the law is passed, it will take effect on January 1, 2022.
Due to climate, power supply and lighting regulations, Canada has always been attractive to mining. The hardware used by cryptocurrency miners generates a lot of heat and needs to be cooled to prevent overheating. Being located in a relatively cool climate like Canada can help reduce the cost of cooling computers. Canadian digital asset companies can not only provide exchange services, but also own and operate crypto mining facilities. Many provincial governments in Canada are considering lower interest rates to attract Bitcoin miners to settle in.
The Labrador Provincial Government is considering introducing new energy incentive policies to meet the potential service needs of Bitcoin and other "data center" processors. Quebec is one of the regions with the lowest electricity prices in North America. For industrial consumers, the electricity price is about $0.05 per kilowatt hour. Energy consumption is the main cost of cryptocurrency miners and the primary reason why they are attracted to Canada. The Quebec government tried new energy incentives, but due to the high demand for Bitcoin miners, the province recovered the incentives for low electricity prices, even though the demand for mining electricity continued to grow.
The content of this article is mainly from the "Blockchain Mining Development Report (2020-2021)", if you want to get the report, you can download the RHY APP (downloaded can be ignored), log in to the APP, enter the blockchain chat on the homepage, customer service specialist RHY service will automatically send a report to you.