Sichuan power company denies reports of ban on Bitcoin mining

Updated 2017-11-16 09:02:11 Global Times

A State-owned electric company in Southwest China's Sichuan Province has denied a reported local ban on Bitcoin mining on Wednesday, saying that "it does not have the right to determine whether Bitcoin mining is legitimate or not in China," financial news website caixin.com reported on Wednesday.

On Tuesday night, a notice issued by the Danba county branch of the State Grid's Sichuan electric utility titled "An Emergency Notice on Banning Bitcoin Production" went viral on the Internet.

The document specifically stated that "Bitcoin mining is an illegal activity."

It also stressed that "State Grid connected power generators that provide electricity for Bitcoin mining should immediately stop doing so; otherwise they will be punished."

The document quickly sparked market speculation that the county-level decision could signal a looming administrative ban on Bitcoin mining, following the Chinese government's recent crackdown on initial coin offerings and a ban on trading of cryptocurrencies against the Chinese yuan, news website thepaper.cn reported on Wednesday.

A local executive from the power company confirmed the authenticity of the document.

But he said that the notice was just an internal memo rather than a formal document, and some of the sentences were improperly worded.

"It was drafted to urge local power generators to prioritize supplying electricity for civil use over business purposes," as rivers in the area have entered a dry season, leading to a cut in power supply, the executive told caixin.com.

"We are a company, not an administrative branch that has the right to determine whether Bitcoin mining is legitimate or not," the executive continued.

China has not considered a ban on Bitcoin mining, the caixin.com report said, quoting sources close to the matter.

Bitcoin mining is an activity through which new Bitcoins are released.

The process consumes vast amounts of computing power and electricity.

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