Bitcoin Mining Might Be China's Secret Goldmine

China is quietly re-emerging as one of the world’s most profitable Bitcoin mining hubs, despite maintaining an official nationwide ban on mining since 2021. New industry data shows the country now accounts for an estimated 14% to 20% of global hashrate, placing it firmly back inside the top three global mining centers.

Far from being an accidental resurgence, the revival appears to be the result of Beijing’s increasingly pragmatic approach to managing its vast domestic energy surplus — and the growing realization that mining, though politically sensitive, remains too economically lucrative to ignore.

Cheap Electricity and Excess Energy Turn “Banned” Mining Into a Quiet Cash Machine

While Beijing publicly maintains a hardline stance against domestic Bitcoin mining, the reality on the ground tells a different story. Energy-rich regions such as Xinjiang and Sichuan are overflowing with electricity that cannot be exported, leaving massive surpluses that would otherwise go unused.

Local miners, grid operators, and private data-center owners have stepped in to fill the gap, turning abandoned or under-utilized industrial sites into clandestine mining farms that operate just below regulatory radar.

In Xinjiang, where coal and wind power plants routinely generate far more energy than the grid can transport, miners have become a convenient outlet — a way to soak up surplus electricity while quietly stimulating local economies. One miner based in Urumqi revealed

"A large part of the energy cannot be transmitted outside Xinjiang, so we can consume it via crypto mining...New mining projects are under construction. All I can say is that people mine where electricity is cheap."

The resurgence is visible not only in hashrate data but also in hardware demand. Mining-rig manufacturer Canaan has seen domestic sales skyrocket — rising from single-digit percentages after the crackdown to more than 50% of its total revenue in 2025, fueled by rising Bitcoin prices and supply-chain uncertainty linked to U.S. tariffs.

The combination of cheap power and accessible hardware has revived China’s mining ecosystem from the shadows, turning forgotten power surpluses into a highly profitable backdoor industry.

At the same time, evidence suggests the resurgence extends beyond Bitcoin. Ethereum-based GPU projects, Litecoin farms, and even stablecoin experimental nodes have quietly appeared across regions previously known for industrial power capacity. Despite its public stance, China’s crypto economy remains active, highly adaptive, and increasingly integrated into its broader digital and energy strategies.

A Pragmatic Strategy: Public Restrictions, Private Gains

China’s approach to digital assets has shifted from strict suppression toward cautious, selective tolerance — especially when strategic or economic incentives are involved. While Beijing continues to promote the digital yuan as the centerpiece of its fintech agenda, it has simultaneously embraced experiment-driven frameworks through Hong Kong.

The signals are clear, even if unspoken. Patrick Gruhn, CEO of Perpetuals.com, does not mince his words

"The resurgence of mining activity in China is one of the most important signals the market has seen in years."

In 2025, Hong Kong rolled out a full regulatory licensing regime for fiat-backed stablecoins, establishing itself as one of the most tightly regulated digital-asset hubs in Asia. This move coincided with Beijing’s interest in yuan-backed offshore stablecoins, which analysts believe could strengthen renminbi adoption in cross-border payments and challenge the dollar-dominated stablecoin market.

This dual-track strategy — prohibition on paper, experimentation in practice — allows China to explore blockchain-based financial models without exposing domestic markets to speculative volatility. Meanwhile, mainland officials appear increasingly willing to ignore underground mining operations as long as they align with local economic needs, support local power grids, or contribute to revenue through indirect channels.

Rather than reversing its crypto ban outright, China has simply shifted toward a “don’t ask, don’t tell” posture that rewards miners who keep a low profile and maintain beneficial relationships with local operators. In this sense, the country’s crypto mining revival is not an accident — it is the natural outcome of a system that values economic output above ideological consistency.

China Isn’t Alone: Russia and Others Quietly Backtrack on Crypto Bans

China’s discreet return to Bitcoin mining mirrors a broader global pattern. Countries that once declared absolute bans — including Russia, Nigeria, India, and Zimbabwe — have since walked back their policies, replacing blanket prohibitions with partial regulations or controlled allowances.

Russia provides one of the clearest parallels. After years of publicly condemning Bitcoin, the country has now embraced mining as a strategic economic tool, particularly in regions with excess energy like Siberia.

Moscow has openly encouraged state-owned energy companies to build mining operations, positioning crypto mining as an export-free way to monetize stranded power resources while bypassing Western sanctions.

Similarly, Nigeria and Zimbabwe — once among the strictest anti-crypto jurisdictions — now view mining and digital-asset activity as engines for economic growth. In each case, policymakers have come to the same conclusion: banning crypto does not eliminate it, and ignoring it only forfeits revenue to underground markets.

Against this international backdrop, China’s covert tolerance looks far less contradictory and far more strategic. Cheap power remains one of the biggest determinants of global mining dominance, and China’s massive overproduction gives it a natural advantage that policymakers appear increasingly unwilling to waste.

Is China Simply Being Smart? A Strategic Use of Wasted Energy

China’s unofficial mining comeback raises a bigger question: Is the country being shrewd by monetizing its excess energy rather than letting it go to waste?

On an economic level, the logic is difficult to ignore. China produces enormous amounts of unused electricity each year due to misaligned industrial demand, transmission bottlenecks, and overinvestment in regional power plants. Bitcoin mining — inherently mobile and highly energy-efficient — provides a way to convert otherwise wasted electricity into hard revenue, without requiring new infrastructure or risking grid stability.

Politically, China avoids formally lifting the ban, maintaining regulatory control and preventing domestic speculation while still benefiting from the financial upside of underground mining activity. In practice, this allows local governments and power providers to operate in a gray zone where everyone wins: miners gain access to cheap power, regional economies benefit from the activity, and China preserves its geopolitical leverage within the global crypto ecosystem.

Whether one views China’s approach as inconsistent or ingenious, the outcome is the same: the country is once again one of the world’s most influential Bitcoin mining hubs — all while insisting the industry remains illegal.

As long as electricity remains abundant and profits remain high, China’s quiet resurgence in mining may continue shaping the global hashrate for years to come.