From dominance to ban: The 2021 crackdown
Before 2021, China controlled a large portion of global Bitcoin (BTC) mining. Data from the Cambridge Bitcoin Power Consumption Index shows that Chinese miners generated about 65% of the world’s Bitcoin computing power in 2020.
In 2021, the Chinese government moved to curb mining activity. Officials cited concerns about financial risks, capital outflows and the high electricity consumption required 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 supplies to countries such as the United States, Kazakhstan, and Russia.
Even though China banned crypto mining, global electricity consumption by BTC miners continues to grow. The nation was reduced by rapid growth in other countries. Annual electricity consumption for Bitcoin mining increases from 89 terawatt hours (TWH) in 2021 to 121.13 TWH in 2023.
2024-2025 recovery of mining operations
Mining operations have resumed in various parts of China, although they appear to be smaller and fewer than the large farms that operated in the past.
According to Hashrate Index data reported in October 2025, China now accounts for approximately 14% of global Bitcoin mining, making it the third largest mining country after the United States and Kazakhstan. Analysts at Onchin research firm Cryptocoin go further, estimating that the actual share of Bitcoin mining in China is between 15% and 20%.
The booming resale sales of rig maker Canaan, one of the largest manufacturers of bitcoin mining machines, also indicate a resurgence in bitcoin mining in China. Only 2.8 percent of China’s revenue in 2022. By 2023, that number had risen to 30%, and industry sources say it will cross 50% in the second quarter of 2025.
do you know Bitcoin’s network is secured by miners who compete to solve cryptographic puzzles, yet no single entity has mastered it over the long term. The geographic shift from China to the US in Central Asia shows its resilience against political and economic constraints.
Reasons behind the revival of mining operations in China
According to a Reuters Reportmining operations have resumed in Xinjiang and Sichuan in the past two years. Xinjiang is an energy-rich province that has supported mining activity. Since most of its excess energy cannot be transferred out of the region, it is often used for crypto mining.
Many inland areas of China generate more electricity than they can efficiently transmit to coastal cities. In provinces such as Xinjiang and Sichuan, the excess power drawn primarily from coal would otherwise be unused. Using this low-cost or trapped 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 electricity to Bitcoin miners. The rise in Bitcoin prices since 2024 has further boosted the profits of these miners.
Increased data center capacity coupled with rising Bitcoin prices could create an optimal environment for a resurgence of cryptocurrency mining.
The main factors behind the increase in Bitcoin mining activity include the following:
Availability of cheap or underutilized power: When provinces like Xinjiang and Sichuan have more than enough power, the surplus can be used for mining.
Surplus Computing Infrastructure: Overdeveloped data center facilities are actively seeking clients to utilize their capacity.
Elevated Bitcoin Price Environment: A higher bitcoin price, supported in part by favorable cryptocurrency policy changes in the US, improves mining profitability.
Reclamation mining activity is concentrated in areas rich in power:
Xinjiang has established industrial facilities, along with a lot of coal and wind power.
Sichuan is known for its low-cost hydropower during the rainy season.
Additional energy and favorable local conditions with other western provinces.
do you know Every four years, Bitcoin undergoes a halving Which reduces miner rewards by 50%. This built-in scarcity mechanism simulates the extraction of gold and often triggers large market cycles, creating long-term supply dynamics.
China’s Changing Attitudes Toward Digital Assets
China’s policy toward digital assets is shifting from outright rejection to selective, strategic acceptance. Beijing is showing greater openness to carefully manage digital asset infrastructure.
Hong Kong’s consolidated 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 expand international use of China’s currency, the renminbi. China is also rolling out its central bank digital currency, ECNY, and integrating it into public services, cross-border pilot programs and everyday retail payments.
These developments suggest that China’s approach is shifting from comprehensive bans to controlled experiments. Digital assets that advance financial stability and national economic goals can be allowed to operate.
