Bitcoin mining is quietly returning to China despite a four-year-old ban on cryptocurrency activities, with the country now accounting for 14% of global mining operations, Reuters reported Monday.
China has climbed to third place in global bitcoin mining after its market share fell to zero following Beijing's 2021 crackdown on cryptocurrency trading and mining, according to Hashrate Index data cited by the news agency.
The resurgence is concentrated in energy-rich provinces like Xinjiang, where miners are exploiting cheap electricity and surplus computing capacity from data center overinvestment, Reuters reported, citing miners and industry sources.
A private miner in Xinjiang told Reuters that excess energy in the region that cannot be transmitted elsewhere is being consumed through crypto mining, with new projects currently under construction.
Equipment sales data support the trend. Mining rig manufacturer Canaan generated 30.3% of its global revenues in China last year, up sharply from 2.8% in 2022, according to company filings cited by Reuters. A source told the news agency that China's share of Canaan's sales exceeded 50% in the second quarter of this year.
Patrick Gruhn, CEO of Perpetuals.com, told Reuters the resurgence represents "one of the most important signals the market has seen in years", suggesting regional economic incentives are driving policy flexibility.
Blockchain analytics firm CryptoQuant estimates 15% to 20% of global bitcoin mining capacity now operates in China, Reuters reported.
China's National Development and Reform Commission, which issued the 2021 ban citing financial stability and energy concerns, did not respond to Reuters' requests for comment.
The mining comeback coincides with signs Beijing may be softening its stance on digital assets, including Hong Kong's stablecoin bill taking effect in August and reported consideration of yuan-backed stablecoins, according to the report.
