From Dominance to Ban: The 2021 Crackdown
Before 2021, China controlled a big portion of the world's Bitcoin (BTC) mining. Data from the Cambridge Bitcoin Electricity Consumption Index shows that Chinese miners produced about 65% of worldwide Bitcoin computing power in 2020.
In 2021, the Chinese government decided to stop mining activities. Authorities expressed concerns about financial risks, capital outflows and high electricity consumption for mining. In September 2021, the People's Bank of China declared all cryptocurrency transactions illegal and confirmed the nationwide ban on mining.
The immediate result was a pointy decline in the worldwide hash rate as many Chinese mining facilities closed or relocated their equipment to countries equivalent to the US, Kazakhstan and Russia.
Even though China has banned crypto mining, global electricity consumption by BTC miners continued to rise. The decline within the country was offset by rapid growth in other countries. Annual electricity consumption for Bitcoin mining increased from 89 terawatt hours (TWh) in 2021 to roughly 121.13 TWh in 2023.
Total Bitcoin electricity consumption
The recovery of mining operations in 2024-2025
Mining operations have resumed in various parts of China, although they’re smaller and fewer visible than the big farms that operated up to now.
According to hashrate index data released in October 2025, China now accounts for about 14% of worldwide Bitcoin mining, making it the third largest mining country after the United States and Kazakhstan. Analysts at on-chain research firm CryptoQuant go a step further and estimate that the actual share of Bitcoin mining in China is between 15 and 20%.
Rapidly rising sales by oil rig maker Canaan, one in all the biggest makers of Bitcoin mining machines, also point to a resurgence of Bitcoin mining in China. China accounted for just 2.8% of Canaan's sales in 2022. By 2023, this had risen to 30%, and in response to industry sources, it was over 50% within the second quarter of 2025.
Did you realize? The Bitcoin network is secured by miners who compete to resolve cryptographic puzzles, but no single company has ever controlled it long-term. Geographical shifts from China to the United States to Central Asia exhibit the country's resilience to political and economic disruptions.
Reasons for the resurgence of mining operations in China
According to a Reuters report, mining operations have resumed in Xinjiang and Sichuan up to now two years or so. Xinjiang is an energy-rich province that has promoted mining. Since much of the surplus energy can’t be transported out of the region, it is usually used for crypto mining.
Many inland regions of China produce more electricity than they will efficiently transmit to coastal cities. In provinces equivalent to Xinjiang and Sichuan, excess electricity, which is principally generated from coal, would otherwise remain unused. Using this low-cost or unused electricity to power mining equipment has grow to be a viable option.
Local governments have also built large data centers in recent times. If regular demand for these facilities is lower than expected, owners can rent space and electricity to Bitcoin miners. Rising Bitcoin prices since 2024 have further increased the profits of those miners.
Excessive data center capability combined with rising Bitcoin prices could have created an optimal environment for the resurgence of cryptocurrency mining.
The underlying aspects behind the rise in Bitcoin mining activity include the next:
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Availability of low-cost or underused electricity: When provinces like Xinjiang and Sichuan have good enough electricity, the surplus will be used for mining.
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Excess computing infrastructure: Overdeveloped data center facilities are actively in search of customers to utilize their capability.
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Elevated Bitcoin Price Environment: A high Bitcoin price, partly supported by favorable cryptocurrency policy changes within the US, improves mining profitability.
Resurgent mining activity is concentrated in regions with abundant electricity:
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Xinjiang with abundant coal and wind power in addition to established industrial facilities.
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Sichuan is thought for its low-cost hydroelectric power in the course of the rainy season.
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Other western provinces with surplus energy and favorable local conditions.
Did you realize? Every 4 years, Bitcoin halves, cutting miners' rewards by 50%. This built-in scarcity mechanism mimics gold mining and infrequently triggers large market cycles while shaping long-term supply dynamics.
Changing attitude in China towards digital assets
China's policy toward digital assets moves from outright rejection to selective, strategic acceptance. Beijing is showing greater openness to rigorously regulated digital asset infrastructure.
Hong Kong's stablecoin licensing framework, which got here into force in August 2025, reflects this broader approach. Hong Kong is an element of China, but is designated as a special administrative region.
On the mainland, authorities are exploring yuan-backed stablecoins as a technique to increase international use of the renminbi, the Chinese currency. China can also be rapidly developing its central bank digital currency, e-CNY, integrating it into public services, cross-border pilot programs and on a regular basis retail payments.
These developments show that China's approach is shifting from blanket bans to controlled experiments. Digital assets that support financial stability and promote national economic goals could also be permitted to operate.
