(Yicai Global) March 3 -- China’s Inner Mongolia Autonomous Region will shut down all existing cryptocurrency mining projects by the end of next month and veto any new ones as the power-hungry industry puts excessive strain on its energy supply, The Paper reported today.

The dry rolling grassplains of Inner Mongolia mainly rely on coal-fired thermal power to generate electricity, said Li Lianxuan, chief researcher at blockchain platform OKLink. Energy-intensive industries drive up pollution and may also be hindering the autonomous region’s green development goals.

Most of the miners will shift their equipment to areas with sufficient hydropower, such as southwestern Sichuan and Yunnan provinces, while others will sell their machines, the report said.

The move will not have a big impact, Li said. It will just push cryptocurrency mining to other regions. So long as the industry is profitable, companies will continue to enter.

Bitcoin has surged almost six-fold in value in the last 12 months, trading at USD50,942 today from USD8,757 a year ago. The huge gains see ever more miners entering the field hoping to get a piece of the pie. However the production of cryptocurrencies rely on massive banks of computers that process highly complex mathematical puzzles, called mining, to generate a virtual coin, consuming vast amounts of power.

As a result, Bitcoin miners are concentrated in areas where electricity is cheap and plentiful, such as the Xinjiang Uyghur Automous Region and the inland provinces of Yunnan, Sichuan and Guizhou. Much of the Bitcoin mining equipment in China has already been classed as “outdated” in recent years and is facing replacement, a miner said.

China’s Bitcoin mining industry has the 28th highest energy consumption in the world, according to the International Energy Agency. At 129.22 terawatt-hours of power a year, this is more than the total electricity consumption in over 100 countries,

Editor: Kim Taylor