China, a Bitcoin mining giant, despite crypto ban
Despite the 2021 crypto mining and trading ban, data finds that China continues to control 55 percent of the global Bitcoin network’s hashrate.
According to CryptoQuant data, while countries like the US are continually challenging China’s dominance by increasing their share of hashrate, the country’s significant presence in Bitcoin mining persists.
The US mining pools account for approximately 40 percent of the global Bitcoin network’s hashrate, as noted by CryptoQuant CEO Ki Young Ju. Representing a large part of this group are institutional miners, who leverage advanced technology and resources to maintain their competitive edge.
Contrary to the US, Chinese mining pools support smaller players in the region, demonstrating resilience despite the legal restrictions on crypto mining and trading.
China’s stance on Crypto
China currently has the strictest stance on crypto globally. In 2017, the country took the first official action against the industry by banning Initial Coin Offerings (ICOs) and shutting down domestic exchanges. Following this was the 2021 ban on crypto activities like mining and trading. The measure was implemented to reduce financial risks and manage the flow of money in the system.
The latest restriction aimed to crackdown on the financial and environmental risks associated with digital assets. However, the miners have found ways around the restrictions thanks to the decentralised nature of Bitcoin. Therefore, maintaining China’s continued control and influence over the global Bitcoin network.
Moreover, underground crypto trading markets are flourishing in the country through the use of VPNs and social media platforms, with estimates of the annual volume of crypto transactions in China at about $86 billion.
Apart from the country’s stance on crypto, it has explored alternatives like the digital yuan, a central bank digital currency (CBDC) controlled by the People’s Bank of China (PBoC). The digital yuan falls under the country’s broader strategy to maintain financial control over the digital currency while limiting the influence of decentralised cryptocurrencies like Bitcoin.
