Bitcoin Miners Are Shifting Outside China Amid State Clampdown

Updated on
  • Policy makers outlined curbs on mining this week, people say
  • Canada, Iceland, U.S. are among alternative destinations
China Said to Curb Power Supply for Bitcoin Miners

As China’s crackdown on cryptocurrencies broadens to bitcoin miners, some of the industry’s biggest players are shifting operations overseas.

Bitmain, which runs China’s two largest bitcoin-mining collectives, is setting up regional headquarters in Singapore and now has mining operations in the U.S. and Canada, Wu Jihan, the company’s co-founder, said in an interview. BTC.Top, the third-biggest mining pool, is opening a facility in Canada and ViaBTC, ranked No. 4, has operations in Iceland and America, their founders said.

The moves underscore how China’s once-dominant role in the world of cryptocurrencies is shrinking as policy makers clamp down.

After banning initial coin offerings and calling on local exchanges to halt virtual currency trading last year, Chinese authorities outlined proposals this week to discourage bitcoin mining -- the computing process that makes transactions with the cryptocurrency possible. Officials plan to limit the industry’s power use and have asked local governments to guide miners toward an “orderly” exit from the business, people familiar with the matter said.

Read more: A QuickTake explainer on bitcoin and blockchain

While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry. Miners have until recently flocked to China because of the country’s inexpensive electricity, local chipmaking factories and cheap labor. They now have little choice but to look elsewhere.

“We chose Canada because of the relatively cheap cost, and the stability of the country and policies,” Jiang Zhuoer, founder of BTC.Top, said in an interview. He also considered locations in Iran and Russia.

Bloomberg News reported the Chinese government’s planned curbs on Wednesday. The People’s Bank of China didn’t respond to faxed requests for comment.

Bitcoin, which surged 15-fold last year, climbed about 6 percent at 5:32 a.m. New York time.

For more on cryptocurrencies, check out the Decrypted podcast:

— With assistance by Steven Yang

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE