In 2021, China enacted a ban on cryptocurrency mining and transactions to mitigate financial crimes and safeguard its economic stability from the hazards associated with unregulated digital assets. The People’s Bank of China (PBOC) officially declared that all activities involving cryptocurrencies are unlawful, prompting the cessation of cryptocurrency mining. Additionally, the government raised concerns about money laundering, fraud, and capital outflows.
Even after the crackdown, mining operations did not completely stop. The miners moved their hardware to remote locations where enforcement was less strict. According to the Global Hashrate Map of Luxor for Q4 2025, China holds a 14.05% share of the total global Bitcoin computational power, equivalent to approximately 145 exahashes per second (EH/s). With this, China now ranks third, behind the United States and Russia, in global Bitcoin mining capacity.
It is estimated that a significant portion of China's underground mining is concentrated in Xinjiang. The energy is cheap and reliable, and the region's isolated terrain is ideal for discreet operations. ASIC supply chain sources indicate that miners have returned to the area despite the ban. Small-scale facilities now operate quietly, often using renewable or surplus energy sources to avoid detection.
In addition, the resurgence of mining activities suggests that the government may not eliminate decentralized mining networks. Access to Bitcoin mining is not restricted, and thus, it poses a challenge for even the most stringent regulators to control. Some experts believe that these secretive operations strongly suggest that China, despite government restrictions, remains a major player in the cryptocurrency space.
Although China has banned mining, its firms still dominate global production of Bitcoin mining hardware. Worldwide, over 95% of all ASIC mining equipment is manufactured by companies such as Bitmain, MicroBT, and Canaan. Furthermore, this gives China significant influence over mining companies' supply chains and raises security concerns for other countries.
Analysts warn that reliance on Chinese-made mining devices poses risks of cyberattacks and infrastructure threats. The connection of US power grids to millions of mining machines manufactured in China is a source of concern because it may expose vulnerabilities.
Furthermore, the matter has led to a significant trade conflict, as the US has imposed tariffs on mining equipment from China, and it is highly likely that these rates will increase again in 2025.
China's ongoing involvement in Bitcoin mining, whether through secretive activities or hardware manufacturing, has expanded its impact on the global cryptocurrency industry. Despite bans, the country continues to exert significant influence over Bitcoin's energy use and supply chain.