Experts doubt China will lift bitcoin mining ban despite uptick and excess energy supply

A mild uptick in bitcoin mining in China has prompted calls for Beijing to loosen its restrictions and let the power-hungry industry tap into the country’s oversupply of energy, but experts said the likelihood of China ending its mining ban was low.\nChina’s bitcoin mining market share by hash rate rose from 13.75 per cent in the first quarter of 2025 to 14.06 per cent in the current quarter, making it the third largest bitcoin mining country behind the US and Russia, according to Hashrate Index, a data platform operated by US bitcoin mining firm Luxor Technology.\nThe Hashrate Index did not disclose market share by country before this year. China’s hash rate plunged to zero in July 2021, two months after Beijing vowed to crack down on bitcoin mining, according to 2021 data by the Cambridge Bitcoin Electricity Consumption Index (CBECI).\nHash rate is a unit of measure for the bitcoin network’s processing power for verifying transactions and mining new cryptocurrency tokens. CBECI mining map data showed that China’s bitcoin mining market share had already bounced back to 22.29 per cent by September 2021. The organisation stopped updating its map data in February 2022.\n\nThe uptick in bitcoin mining activity in China this year coincides with increased calls from scholars for Beijing to reconsider its rigid bitcoin mining ban. In recent years, Beijing has escalated its crackdown on various cryptocurrency-related businesses, maintaining that they disrupted economic and financial order and were a breeding ground for criminal activity.\nIn an article titled “Reinstate Crypto Mining to Facilitate China’s Transition to Carbon Neutrality” published in March, Guojun He, professor in Economics at the University of Hong Kong (HKU) and the associate director of HKU’s Institute of China Economy, suggested that the country use crypto mining to help utilise its excess renewable power.\nChina’s oversupply rate of solar energy in some regions had exceeded 10 per cent while that of wind energy had reached up to 15 per cent, He noted, citing government data. Integrating crypto mining into the power grid adjustment system would absorb surplus power, stabilise grid operations and generate economic benefits, He wrote.\nWang Yang, previously vice-president at the Hong Kong University of Science and Technology before joining HKU earlier this year, said in June last year that it was “unwise” for China to completely ban crypto mining as it drove related businesses to the United States.\nUS President Donald Trump’s embrace of the crypto sector and the passing of the US stablecoin law this year have prompted many industry participants to believe that Beijing was shifting its attitude about digital assets, acknowledging their strategic value amid competition with the US.\nThat has also fuelled speculation by some in the industry that Chinese authorities are behind the increased bitcoin mining activity in China. Some local governments in China may have encouraged state-owned firms to take up bitcoin mining as it could reduce electricity waste and generate income, according to one Chinese executive in the cryptocurrency industry, who declined to be identified due to the sensitive nature of the matter.\nStill, it was unlikely that Chinese authorities would officially allow crypto mining, experts said.\n“From an energy perspective, China’s power generation capacity has expanded rapidly in recent years, which – objectively speaking – has provided temporarily cheap electricity for some grey-market cryptocurrency mining operations,” said David Zhang, a macroeconomics and policy analyst at Trivium China.\nBut Beijing has always placed its strategic focus on industrial artificial intelligence applications and high-performance computing, sectors that would generate soaring demand for electricity over the next 5 to 10 years, according to Zhang. The country therefore would not permit energy intensive activities that contradict its development goals, such as bitcoin mining, to persist or expand, he said.\nA recent warning about the risks of digital assets from Pan Gongsheng, governor of the People’s Bank of China, also reflected China’s unchanged stance, according to Yang Liu, a partner at DeHeng Law Offices in Beijing.\n“I don’t think the country will be able to encourage mining activities in the short term, let alone get involved in mining itself,” Liu said.\n