- China joins the top 3 global Bitcoin mining hubs despite a 2021 national ban.
- Crypto bans are not sustainable in countries like China, Nigeria, and India, as they are harder to maintain.
China is back in the top three Bitcoin (BTC) mining hubs in the world despite a 2021 nationwide ban. The Chinese government expected that the Bitcoin industry would disappear; however, four years later, the mining data tells a different story.
Chinese Bitcoin Miners Defy 2021 National Ban
According to a recent report from Reuters, China is gradually staging a comeback in Bitcoin mining. After the 2021 ban, Mining farms were dismantled, and the hash rate collapsed to nearly zero. Consequently, mining operators sought refuge in other jurisdictions, including Kazakhstan, Russia, and the United States.
Four years down the line, China is back and is currently ranked among the top three crypto mining centers in the world. Chinese crypto miners now contribute approximately 14-20% of the total Bitcoin hashrate.
This comeback is closely attributed to the emergence of underground Bitcoin mining, largely concentrated in regions with cheap and abundant electricity. Chinese crypto miners are moving en masse to regions like Xinjiang and Sichuan, historically known for excess hydropower and stranded energy.
Crypto mining operations in these regions reportedly resumed in late 2024, with new projects under construction. Analysts say they are not surprised by the re-emergence of Bitcoin mining in China.
They pointed out that network data showed crypto mining activity creeping back into Chinese territory within a year of the ban. Despite Beijing’s ongoing hostility toward decentralized digital assets, China currently sits comfortably behind only the U.S. and either Russia or Kazakhstan in global hashrate share.
Crucially, the rebound in Bitcoin mining activities in China coincides with the BTC reaching record highs in October. This rally comes on the back of U.S. President Donald Trump’s pro-crypto policies and growing distrust toward the dollar.
However, as global risk appetite wanes, the BTC price is currently down roughly a third from its October peak. At press time, BTC is priced at $86,058, down 0.86% over the past 24 hours.
Besides the Bitcoin mining resurgence, China is also weighing a Yuan-backed stablecoin to expand its global footprint, as we discussed earlier.
Other Nations Defying Crypto Bans
Notably, the attempt to wipe out Bitcoin mining is not unique to China. Several countries have tried to outlaw crypto over the past decade. However, many quickly reverse course once the government discovers that bans are difficult to enforce and even harder to maintain.
In 2022, Russia briefly considered a full crypto ban that targeted mining, trading, and payments. Within a few weeks after the announcement, the proposal collapsed as the government decided regulation was more practical.
The Russian government has now legalized crypto mining and even permits the use of cryptocurrency for international trade. As highlighted in a previous article, Minister Siluanov emphasized the need for legalization and tighter regulation to prevent uncontrolled currency outflows.
In Nigeria, the Nation’s Central Bank (CBN) directed financial institutions to close accounts of crypto traders and prohibit transactions in February 2021.
The CBN lifted the ban in December 2023 and authorized banks to facilitate crypto transactions through licensed Virtual Asset Service Providers (VASPs). Still, peer-to-peer trading remains restricted but monitored.
However, regulation now includes oversight from the Securities and Exchange Commission (SEC). This is in addition to KYC requirements and anti-money laundering rules.
In Asia, the Reserve Bank of India (RBI) issued a circular prohibiting banks from conducting crypto transactions through the formal banking system in April 2018.
In March 2020, the Supreme Court of India ruled the ban was unconstitutional, allowing banks to resume services for crypto exchanges.
Since then, India has shifted to regulation, and cryptocurrencies are legal, but taxed at 30% on gains and 1% TDS on transfers.