At a closed-door meeting on Wednesday the People’s Bank of China outlines plans to limit power use by some Bitcoin (Bitcoin) miners, Bloomberg reported, quoting people familiar with the matter.
China is home to many of the world’s largest miners, some of whom have set up around hydroelectric facilities in Sichuan and Yunnan provinces.
While the proposed restrictions are unlikely to have a noticeable effect on transaction speeds, they highlight global concerns over the growing energy consumption of Bitcoin miners.
“This may have contributed to Bitcoin coming off its daily highs,” said Craig Erlam, senior market analyst at online trading firm Oanda in London.
“Electricity usage certainly appears to be a significant challenge for the cryptocurrency in the years ahead,” he said.
Local officials have been asked to investigate the high consumption associated with the industry, as the government is concerned that Bitcoin miners have taken advantage of low power prices in some areas and affected normal electricity use in some cases.
The decision follows a sweeping cryptocurrency crackdown last year. Authorities outlawed initial coin offerings in September and have called on local exchanges to halt virtual currency trading.