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China Is Crushing the U.S., Leading Bitcoin Mining Despite Cryptocurrency Ban. Discover How the Asian Giant Remains on Top, Defying the Rules
Despite China’s strict ban on cryptocurrency mining and trading since 2021, the country continues to exert significant control over the global Bitcoin network, with 55% of the hash rate still under its dominion.
This phenomenon occurs even in the face of severe restrictions, reflecting the resilience of local miners who continue to operate in an increasingly competitive market. According to data from CryptoQuant, this massive presence still faces challenges, particularly with the growing share of other countries, such as the United States, which have increased their stake in Bitcoin mining.
The Growing U.S. Presence in Bitcoin Mining
The CEO of CryptoQuant, Ki Young Ju, noted that mining pools in the United States now account for approximately 40% of the Bitcoin network’s hash rate. This is the result of institutional miners who utilize advanced technologies and vast financial resources to consolidate their position.
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Investment in Bitcoin mining infrastructure focused on renewable energy has been one of the main competitive advantages for the U.S., allowing the country to establish itself as a major player in the cryptocurrency market.
Unlike the U.S., where large institutions dominate the sector, Bitcoin mining in China is still concentrated among smaller miners who find ways to continue their operations despite legal restrictions.
These small miners, often located in remote areas with access to cheap energy sources, such as hydroelectric power, are supported by Chinese mining pools that demonstrate remarkable resilience.
China’s Strict Ban on Cryptocurrencies
China’s crackdown on cryptocurrencies began in 2017 when the country banned Initial Coin Offerings (ICOs) and shut down local cryptocurrency exchanges.
The ban intensified in 2021 with the complete suspension of Bitcoin mining and cryptocurrency trading in the country.
The Chinese government justified these measures with concerns related to financial and environmental risks. However, the decentralized nature of Bitcoin has allowed miners to continue operating clandestinely, circumventing government restrictions.
Moreover, illegal cryptocurrency trading markets continue to thrive in China, using VPNs and social media platforms to facilitate transactions.
It is estimated that the annual volume of cryptocurrency transactions in the country is around US$ 86 billion, despite government repression. This figure reflects the continued demand for digital assets, even in a highly regulated environment.
The Chinese Alternative: The Digital Yuan
While combating decentralized cryptocurrencies, China is advancing the development of its own digital currency, the digital yuan, controlled by the People’s Bank of China (PBoC).
The introduction of this central bank digital currency (CBDC) is part of a broader strategy by the Chinese government to maintain control over the national financial system while limiting the influence of cryptocurrencies like Bitcoin.
The digital yuan is seen as a way to modernize the Chinese financial system and provide the government with more control over capital flows in and out of the country.
The launch of this CBDC aligns with China’s efforts to combat corruption and increase transparency in financial transactions, objectives that also justify its stance against decentralized cryptocurrencies.
Calls for Change
While China maintains a rigid stance on cryptocurrencies, prominent figures in the industry have called on the government to reconsider its policies. Justin Sun, founder of Tron, is one such voice. He argues that China should promote competition with the United States regarding cryptocurrency policy, suggesting that this could drive innovation and development in the crypto asset industry.
Under Donald Trump’s leadership, the U.S. adopted a pro-Bitcoin agenda, helping the country establish itself as a global leader in the sector. Sun believes that healthy competition between the two largest economies in the world could benefit Bitcoin mining for both technological development and the global financial sector.
There are signs that China may be softening its position, especially with the growing interest in blockchain technologies and potential regulatory revisions. Hong Kong, for example, is emerging as a center for cryptocurrencies, with the implicit support of Beijing. This move suggests that China may be exploring alternatives to strike a balance between financial innovation and regulatory control.
Although there have been no official changes to China’s strict regulations to date, these developments indicate a possible easing in the future.
The combination of external pressure, technological innovations, and the success of other countries in adopting cryptocurrency policies may influence how China approaches digital assets going forward.
China continues to play a central role in the global Bitcoin network, even amid the strict ban on cryptocurrencies. Despite the restrictions, the country maintains its relevance in Bitcoin mining, although it faces growing challenges from other nations, like the U.S.
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