From dominance to ban: The 2021 crackdown
Earlier than 2021, China managed a big share of worldwide Bitcoin (BTC) mining. Information from the Cambridge Bitcoin Electrical energy Consumption Index reveals that Chinese language miners produced about 65% of the world’s Bitcoin computing energy in 2020.
In 2021, the Chinese language authorities moved to cease mining exercise. Authorities cited considerations about monetary dangers, capital outflows and the excessive electrical energy use required for mining. In September 2021, the Individuals’s Financial institution of China declared all cryptocurrency transactions unlawful and confirmed the nationwide ban on mining.
The speedy consequence was a pointy drop in world hashrate as many Chinese language mining amenities closed or moved their gear to nations such because the US, Kazakhstan and Russia.
Though China banned crypto mining, world electrical energy use by BTC miners saved rising. The decline within the nation was offset by fast progress in different nations. Yearly electrical energy use for Bitcoin mining elevated from 89 terawatt-hours (TWh) in 2021 to about 121.13 TWh in 2023.
The 2024-2025 restoration of mining operations
Mining operations have resumed in varied elements of China, although they’re smaller and fewer seen than the big farms that operated prior to now.
Based on Hashrate Index information reported in October 2025, China now accounts for about 14% of worldwide Bitcoin mining, making it the third-largest mining nation after the US and Kazakhstan. Analysts on the onchain analysis agency CryptoQuant go additional, estimating that the actual share of Bitcoin mining in China is between 15% and 20%.
Quick-rebounding gross sales of rig maker Canaan, one of many largest producers of Bitcoin mining machines, additionally level to a resurgence in Bitcoin mining in China. China accounted for under 2.8% of Canaan’s income in 2022. By 2023, the determine had risen to 30%, and trade sources say it exceeded 50% within the second quarter of 2025.
Do you know? Bitcoin’s community is secured by miners competing to unravel cryptographic puzzles, but no single entity has ever managed it long-term. Geographic shifts from China to the US to Central Asia present its resilience in opposition to political and financial disruptions.
Causes behind the resurgence of mining operations in China
Based on a Reuters report, mining operations have restarted in Xinjiang and Sichuan over the previous two years or so. Xinjiang is an energy-abundant province that has supported mining exercise. Since a lot of its surplus vitality can’t be transmitted out of the area, it’s typically used for crypto mining.
Many inland areas of China produce extra electrical energy than they’ll effectively transmit to coastal cities. In provinces akin to Xinjiang and Sichuan, surplus energy drawn primarily from coal would in any other case go unused. Utilizing this low-cost or stranded electrical energy to run mining machines has turn out to be a worthwhile possibility.
Native governments have additionally constructed massive information facilities in recent times. When common demand for these amenities is decrease than anticipated, homeowners can hire house and energy to Bitcoin miners. Rising Bitcoin costs since 2024 have additional boosted the income of those miners.
Extreme information heart capability mixed with rising Bitcoin costs might have created an optimum setting for the resurgence of cryptocurrency mining.
The underlying components behind the rise in Bitcoin mining exercise embrace the next:
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Availability of cheap or underutilized energy: When provinces akin to Xinjiang and Sichuan have greater than sufficient energy, the excess can be utilized for mining.
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Surplus computing infrastructure: Overdeveloped information heart amenities are actively searching for purchasers to utilize their capability.
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Elevated Bitcoin worth setting: A excessive Bitcoin worth, supported partially by favorable cryptocurrency coverage adjustments within the US, improves mining profitability.
The resurgent mining exercise is concentrated in power-abundant areas:
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Xinjiang with plentiful coal and wind energy, together with established industrial amenities.
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Sichuan, recognized for low-cost hydropower through the wet season.
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Different western provinces with surplus vitality and favorable native situations.
Do you know? Each 4 years, Bitcoin undergoes a halving that cuts miner rewards by 50%. This built-in shortage mechanism mimics gold extraction and infrequently triggers main market cycles whereas shaping long-term provide dynamics.
Altering angle of China towards digital property
China’s coverage towards digital property is transferring away from outright rejection and shifting towards selective, strategic acceptance. Beijing is exhibiting larger openness to rigorously regulated digital asset infrastructure.
Hong Kong’s stablecoin licensing framework, which took impact in August 2025, displays this broader method. Hong Kong is a part of China, although designated as a Particular Administrative Area.
On the mainland, authorities are exploring yuan-backed stablecoins as a strategy to enhance the worldwide use of the renminbi, China’s foreign money. China can be quickly advancing its central financial institution digital foreign money, the e-CNY, and integrating it into public providers, cross-border pilot packages and on a regular basis retail funds.
These developments present that China’s method is shifting from complete bans to managed experimentation. Digital property that help monetary stability and advance nationwide financial objectives could also be allowed to function.
