In the aftermath of the mining ban in Sichuan, which shut down over 90% of the country’s crypto mining, Chinese miners are moving their operations to other, more crypto-friendly nations like the US, Kazakhstan, Canada, and Russia.
Mining Operations Halted, Miners Consider Exodus
Last Friday, the Sichuan district in China, which used to be a hub for crypto mining, saw a complete shut down of all mining operations. This was the final nail in the coffin for crypto mining in the country, as the government had been imposing similar bans in other districts for quite some time. Most crypto miners were left in the lurch following the news of the latest ban.
For Sichuan’s rural and underdeveloped areas, the large number of dams meant that local power plants produced excess hydroelectricity. As a result, crypto mining plants sprang up all over this region. The miners working in these plants believed that the country-wide crackdown on crypto mining would not affect them as they were using excess electricity that was hydro-powered.
One miner said,
“We just put all the equipment into use and the rainy season is about to come. Suddenly the policy drops, leaving us no time to quit. Now we have to sell most of the mining hardware to cover some of the losses."
Chinese Miners Go Overseas To Set Up New Operation Bases
Amidst such strict regulations and restrictions, Chinese miners are considering relocating to other countries to set up new operations. According to leading Chinese crypto-journalist Colin Wu, large-scale miners and mines are choosing overseas locations, especially in the United States, Kazakhstan, Canada, and Russia.
Chinese Crypto Miners Shift Base To The US
Chinese mining firm SOS Limited partnered up with the US-based Niagara Development LLC to set up a joint venture company in Wisconsin to handle crypto mining.
In a press release issued on Monday, the company said,
"In response to the development of laws and regulations related to China's blockchain business, SOS has begun to transfer its Bitcoin mining business to the US.”
News has also been confirmed of a Chinese logistics firm airlifting 200 units of the bitcoin mining machine, Antminers S19 (which weighs around 3,000 kgs or 6,600 lbs) to Maryland, US.
Texas and Miami are also trying to tempt Chinese crypto miners to set up shop in their states.
Other Countries Welcome Chinese Crypto Miners
The Central Asian country of Kazakhstan is also keen on bringing over crypto mining operations from China. Arman Batayev, deputy director of the investment department of AIFC Business Connect Ltd., an entity under Kazakhstan's financial hub Astana International Financial Centre (AIFC), tweeted,
“Thank you everyone! That was crazy week. KZ overall had 200MWt spare capacity and all was booked in a matter of weeks. Further expansion will require new power plants.”
The South American nation of Paraguay is also eager to adopt the Chinese miners. Congressman Carlos Rejala retweeted a video of Chinese miners shutting down the hardware, saying, "waiting for all of you in Paraguay." According to reports, he plans to present a bill to attract international mining companies and other crypto businesses.
Can Other Countries Fill China’s Shoes?
Crypto-journalist Colin Wu is not convinced that these other nations would be able to meet all the requirements of these dislodged Chinese miners. Commenting further on the situation, he said,
"There seems to be a 25% punitive tariff on goods from China, and the cost of infrastructure in the US is 5-6 times that of China. Kazakhstan and Russia have inadequate business environments and are prone to policy risks. Hydropower facilities in Canada and the Nordic region are insufficient.”
He believes that this move would only work as long-term plans for institutional miners and not for individuals.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.