BEIJING, April 29 (Reuters) - The Chinese capital city of Beijing is conducting a check on data centres involved in cryptocurrency mining to better understand their impact on energy consumption, according to sources and a document seen by Reuters.
The Beijing Municipal Bureau of Economy and Information Technology on Tuesday sent an "emergency notice" to the city's data centre operators to report if they're involved in bitcoin and other cryptocurrency mining businesses.
If so, they need to report the amount, and share, of power consumed by cryptocurrency mining, according to the notice.
An official of the bureau, who declined to be identified, said the probe was directed by city authorities, adding that recipients of the notice include China's three biggest telecoms operators.
He said he was not aware of the reason behind the effort, or whether it is part of a nationwide campaign.
Last month, the Chinese region of Inner Mongolia said it would shut down all cryptocurrency mining projects by the end of April as part of broader efforts to improve energy efficiency.
Cryptocurrency miners use specially-designed computer servers to verify cryptocurrency transactions in the process of producing newly minted virtual currencies, such as bitcoin.
The process requires huge amounts of computing power, and thus electricity. Chinese regions including Inner Mongolia, Sichuan, Yunnan and Xinjiang are attractive "mining" spots due to low electricity prices, though Beijing is not seen as a major cryptocurrency mining centre.
Last week, a sweeping security inspection at power plants in Xinjiang following a coal mine accident disrupted cryptocurrency mining and contributed to volatility in bitcoin prices.
However, China's role as a hub for cryptocurrency mining has been eroded by its ban on crypto exchanges and initial coin offerings (ICOs).
Edward Lu, senior vice president of Canaan Inc, a Chinese maker of cryptocurrency mining machines, said it increasingly serves clients in places such as Canada, northern Europe and central Asia, which have cheap and abundant electricity and clear and predictable regulations.
"China used to be a place where cryptocurrency mining was thriving, but the business is shrinking due to policies," Lu said. (Reporting by Beijing newsroom; Editing by Kim Coghill)