From Domination to Ban: The 2021 Campaign
Before 2021, China controlled a significant share of global Bitcoin (Bitcoin) Mining. Data from the Cambridge Bitcoin Electricity Consumption Index shows that Chinese miners produced about 65% of the world’s Bitcoin computing power in 2020.
In 2021, the Chinese government moved to stop Mining activity. Authorities cited concerns about financial risks, capital outflows and the high use of electricity needed for mining. In September 2021, the People’s Bank of China declared all cryptocurrency transactions illegal and confirmed a nationwide ban on mining.
The immediate result was a sharp decline in global hashrate as many Chinese mining facilities closed or moved their equipment to countries such as the United States, Kazakhstan and Russia.
Although China has banned cryptocurrency mining, the global use of electricity by Bitcoin miners has continued to rise. The decline in the country has been offset by rapid growth in other countries. Annual electricity use for Bitcoin mining rose from 89 terawatt-hours (TWh) in 2021 to about 121.13 TWh in 2023.
Recovery of mining operations 2024-2025
Mining operations have resumed in various parts of China, although they are smaller in scale and less visible than the large farms that operated in the past.
According to Hashrate Index data I mentioned As of October 2025, China now accounts for about 14% of Bitcoin mining globally, making it the third largest mining country after the United States and Kazakhstan. Analysts at research firm CryptoQuant go further, appreciation The real share of Bitcoin mining in China ranges between 15% and 20%.
The rapidly recovering sales of rig maker Canaan, one of the largest manufacturers of Bitcoin mining machines, also indicate a resurgence of Bitcoin mining in China. China accounted for just 2.8% of Canaan’s revenue in 2022. By 2023, the number had risen to 30%, and industry sources say it will exceed 50% in the second quarter of 2025.
Did you know? The Bitcoin network is secured by miners competing to solve cryptographic puzzles, yet no single entity has been able to control it long-term. Geographic shifts from China to the United States to Central Asia show China’s resilience in the face of political and economic turmoil.
Reasons behind the return of mining operations in China
According to Reuters a reportMining operations have resumed in Xinjiang and Sichuan over the past two years or so. Xinjiang is an energy-rich province that supports mining activity. Since much of its excess capacity cannot be transported outside the region, it is often used for mining cryptocurrencies.
Many inland regions of China produce more electricity than they can efficiently transport to coastal cities. In provinces such as Xinjiang and Sichuan, surplus energy derived mainly from coal will go unused. Using this low-cost or stranded electricity to power mining machines has become a profitable option.
Local governments have also built large data centers in recent years. When regular demand for these facilities is lower than expected, the owners can rent the space and power to Bitcoin miners. The rise in Bitcoin prices since 2024 has increased the profits of these miners.
Excessive data center capacity combined with rising Bitcoin prices may have created the perfect environment for a resurgence in cryptocurrency mining.
The primary factors behind the increase in Bitcoin mining activity include:
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Availability of cheap or untapped energy: When provinces such as Xinjiang and Sichuan have enough energy, the surplus can be used for mining.
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Redundant computing infrastructure: Advanced data center facilities are actively looking for customers to leverage their capabilities.
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Bitcoin high price environment: The rising price of Bitcoin, partly supported by favorable changes in cryptocurrency policy in the United States, is improving the profitability of mining.
Renewable mining activity is concentrated in areas with abundant energy:
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Xinjiang has an abundance of coal and wind energy, along with existing industrial facilities.
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Sichuan, known for its low-cost hydroelectric power during the rainy season.
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Other western provinces with excess capacity and favorable local conditions.
Did you know? every four years, Bitcoin undergoes halving This reduces miners’ rewards by 50%. This built-in scarcity mechanism mimics gold mining and often leads to major market cycles while shaping long-term supply dynamics.
China’s changing attitude towards digital assets
China’s policy towards digital assets is moving away from outright rejection and toward selective, strategic acceptance. Beijing is showing greater openness to carefully regulated digital asset infrastructure.
Hong Kong’s stablecoin licensing framework, which came into effect in August 2025, reflects this broader approach. Hong Kong is part of China, although it is designated as a special administrative region.
On the mainland, authorities are exploring yuan-backed stablecoins as a way to increase international use of the renminbi, the Chinese currency. China is also developing its own central bank digital currency, the Chinese e-yuan, and integrating it into public services, cross-border pilot programs and everyday retail payments.
These developments show that China’s approach is shifting from comprehensive bans to controlled experiments. Digital assets that support financial stability and advance national economic goals may be permitted to operate.
