Despite a blanket crypto ban in 2021, China maintains its stranglehold on 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 crypto, China still has a surprising hold on 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 This is partly due to the ingenuity of local miners. Despite the crackdown, many have found ways to continue their activities in the shadows, using various techniques to circumvent restrictions. Some have relocated their operations to neighboring countries while maintaining remote control from China.
Moreover, China's mining infrastructure, developed during years of breakneck growth, remains a major asset. Hydropower-rich regions such as Sichuan retain a significant competitive advantage in operating costs.
A regulatory change of direction on the horizon?
Despite this paradoxical situation, there are signs that China's position on Bitcoin may be changing. Discussions are underway to include crypto transactions in anti-money laundering regulations by 2025, suggesting a more pragmatic approach.
This potential opening is part of a broader context of technological competition with the United States. As mining becomes more professional across the Atlantic, Beijing could seek not to be left behind in a sector that it has long dominated.
However, Chinese authorities remain cautious. Any easing will have to be accompanied by a strict regulatory framework to control financial risks and limit capital flight, major concerns of the government.
China’s continued stranglehold on Bitcoin mining, despite an official ban, illustrates the complexity of the global crypto landscape. Even the crypto black market in China is not left behind and continues to thrive, the future of the sector in China remains uncertain, but could hold surprises.
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