Regulators in the Chinese autonomous province of Inner Mongolia continue to crack down on the province’s crypto mining companies.
The Global Times reported on Nov. 13 that northern China’s Inner Mongolia Autonomous Region is tightening its grip on crypto mining companies, as it intends to dispatch inspection units to assure the “clean-up and rectification of crypto token mining companies” in the region.
“Crypto token market has come to an end in China”
Cryptocurrency mining companies whose businesses are deemed to be irrelevant to the “real economy” will be the key targets in these planned inspections. So are those companies who have been enjoying preferential government policies, which involve local electricity rates, land and taxes “by pretending to be a participant in the big data industry.”
In September, it was reported that the local government issued a notice demanding a clean-up of the crypto mining firms. Five departments within Inner Mongolia felt the need to rectify the mining industry within the province, while the regulators’ position stated that “the virtual currency ‘mining’ industry belongs to the pseudo-financial innovation unrelated to the real economy, and should not be supported.”
It remains unclear how this wave of new inspections will impact miners operating in Inner Mongolia. However, it seems that many who worked in the local crypto mining industry have already moved on to other countries. Yang Wang, a senior research fellow with the Fintech Institute of Renmin University of China, 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.”
Chinese blockchain spending to exceed $2 billion by 2023
China’s spending on blockchain technology will exceed $2 billion in 2023, according to a recent report, which claims that blockchain development in China will see a compound annual growth rate of 65.7% from 2018 to 2023.
The report further pointed out that the bulk of China’s blockchain spending was geared to the banking sector in 2019. While other high-spending industries reportedly included manufacturing, retail, professional services and process manufacturing.