From Dominance to Ban: The 2021 Crackdown
Before 2021, China controlled a large share of global Bitcoin (BTC) 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 electricity use required 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 sharp drop in global hashrate as many Chinese mining facilities closed or moved their equipment to countries such as the US, Kazakhstan, and Russia.
Even though China banned crypto mining, global electricity use by BTC miners kept rising. The decline in the nation was offset by rapid growth in other countries. Yearly electricity use for Bitcoin mining increased from 89 terawatt-hours (TWh) in 2021 to about 121.13 TWh in 2023.
The 2024-2025 Recovery of Mining Operations
Mining operations have resumed in various parts of China, though they are smaller and less visible than the large farms that operated in the past.
According to Hashrate Index data reported in October 2025, China now accounts for about 14% of global Bitcoin mining, making it the third-largest mining country after the US and Kazakhstan. Analysts at the onchain research firm CryptoQuant go further, estimating that the real share of Bitcoin mining in China is between 15% and 20%.
Fast-rebounding sales of rig maker Canaan, one of the largest manufacturers of Bitcoin mining machines, also point to a resurgence in Bitcoin mining in China. China accounted for only 2.8% of Canaan’s revenue in 2022. By 2023, the figure had risen to 30%, and industry sources say it exceeded 50% in the second quarter of 2025.
Did you know? Bitcoin’s network is secured by miners competing to solve cryptographic puzzles, yet no single entity has ever controlled it long-term. Geographic shifts from China to the US to Central Asia show its resilience against political and economic disruptions.
Reasons Behind the Resurgence of Mining Operations in China
According to a Reuters report, mining operations have restarted in Xinjiang and Sichuan over the past two years or so. Xinjiang is an energy-abundant province that has supported mining activity. Since much of its surplus energy cannot be transmitted out of the region, it is often used for crypto mining.
Many inland regions of China produce more electricity than they can efficiently transmit to coastal cities. In provinces such as Xinjiang and Sichuan, surplus power drawn mainly from coal would otherwise go unused. Using this low-cost or stranded electricity to run 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, owners can rent space and power to Bitcoin miners. Rising Bitcoin prices since 2024 have further boosted the profits of these miners.
Excessive data center capacity combined with rising Bitcoin prices may have created an optimal environment for the resurgence of cryptocurrency mining.
The underlying factors behind the increase in Bitcoin mining activity include the following:
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Availability of inexpensive or underutilized power: When provinces such as Xinjiang and Sichuan have more than enough power, the surplus can be used for mining.
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Surplus computing infrastructure: Overdeveloped data center facilities are actively seeking clients to make use of their capacity.
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Elevated Bitcoin price environment: A high Bitcoin price, supported in part by favorable cryptocurrency policy changes in the US, improves mining profitability.
The resurgent mining activity is concentrated in power-abundant regions:
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Xinjiang with plentiful coal and wind power, along with established industrial facilities.
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Sichuan, known for low-cost hydropower during the rainy season.
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Other western provinces with surplus energy and favorable local conditions.
Did you know? Every four years, Bitcoin undergoes a halving that cuts miner rewards by 50%. This built-in scarcity mechanism mimics gold extraction and often triggers major market cycles while shaping long-term supply dynamics.
Changing Attitude of China Toward Digital Assets
China’s policy toward digital assets is moving away from outright rejection and shifting toward selective, strategic acceptance. Beijing is showing greater openness to carefully regulated digital asset infrastructure.
Hong Kong’s stablecoin licensing framework, which took effect in August 2025, reflects this broader approach. Hong Kong is part of China, though designated as a Special Administrative Region.
On the mainland, authorities are exploring yuan-backed stablecoins as a way to increase the international use of the renminbi, China’s currency. China is also rapidly advancing its central bank digital currency, the e-CNY, 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 experimentation. Digital assets that support financial stability and advance national economic goals may be allowed to operate.