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Despite a blanket ban on cryptocurrencies ordered in 2021, China maintains control over the Bitcoin mining industry. A recent analysis reveals that the country still controls 55% of the global hash rate, even ahead of the United States.
China still dominates Bitcoin mining
Three years after Beijing banned cryptocurrencies, China maintains surprising control over the Bitcoin network. According to Ki Young Ju, CEO of CryptoQuant, Chinese mining pools still control 55% of the global hash rate compared to 40% for their American counterparts.
This resilience is partly explained by the ingenuity of the local miners. Despite the crackdown, many have found ways to continue their activities in the shadows, using various techniques to circumvent the restrictions. Some have moved their operations to neighboring countries while maintaining remote control from China.
In addition, China’s mining infrastructure, developed during years of unbridled growth, remains a major asset. Hydropower-rich regions such as Sichuan maintain a significant competitive advantage in operating costs.
Regulatory change of direction on the horizon?
Despite this paradoxical situation, indications point to a possible evolution of China’s position towards Bitcoin. There are ongoing discussions to integrate crypto transactions into anti-money laundering regulations by 2025, suggesting a more pragmatic approach.
This potential opening is part of the larger context of technological competition with the United States. As transatlantic mining becomes more professional, Beijing could struggle to keep up in a sector it has long dominated.
However, Chinese authorities remain cautious. Any liberalization must be accompanied by a strong regulatory framework to control financial risks and curb capital flight, which are the government’s main concerns.
China’s continued control over Bitcoin mining, despite an official ban, illustrates the complexity of the global crypto landscape. The crypto black market in China has not been left out and continues to thrive, the future of the sector in China remains uncertain but may hold some surprises.
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I am passionate about Bitcoin, I love exploring the intricacies of blockchain and cryptocurrency and sharing my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.