China’s 2021 Mining Ban Has Failed Spectacularly — Underground Crypto Miners Lift It to Top 3 Mining Hubs Worldwide

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Key Takeaways

• China’s share of global Bitcoin mining has quietly climbed back to 20% despite a 2021 nationwide ban.

• The country is now the world’s third-largest Bitcoin mining hub again.

• China joins several countries that attempted blanket crypto bans only to reverse course or regulate after enforcement proved ineffective.

When China outlawed Bitcoin (BTC) mining in mid-2021, the government expected the industry would disappear overnight.

For a short moment, it did. Hashrate collapsed to nearly zero. Mining farms were dismantled. Operators fled to Kazakhstan, Russia, and the United States.

However, four years later, the map tells a different story: China is back and is already among the top-ranking crypto mining hubs in the world.

China Quietly Reclaims Its Place in Global Mining

A quiet resurgence of underground Bitcoin mining—largely concentrated in regions with cheap, abundant electricity—has lifted China back into the top three crypto mining hubs globally, according to new reporting from Reuters and network estimates from CryptoQuant.

Current figures suggest Chinese crypto miners now contribute as much as 14-20% of the total Bitcoin hashrate.

Industry sources and new facility builds point to a growing return of crypto miners to Xinjiang and Sichuan, regions historically known for excess hydropower and stranded energy.

Wang, a private crypto miner operating in Xinjiang, told Reuters he restarted operations late last year:

“A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining. New mining projects are under construction.”

This re-emergence isn’t surprising to analysts.

Within a year of the ban, network data showed crypto mining activity creeping back into Chinese territory, despite Beijing’s ongoing hostility toward decentralized digital assets.

Now, China sits comfortably behind only the U.S. and (depending on measurement period) either Russia or Kazakhstan in global hashrate share.

China Isn’t Alone — Crypto Bans Rarely Stick

China’s failed attempt to wipe out Bitcoin mining is hardly unique.

Over the past decade, several countries have tried to outlaw crypto, only to reverse course once they discovered bans are difficult to enforce and even harder to maintain.

Russia

Russia briefly flirted with a full crypto ban in 2022, targeting mining, trading, and payments.

The proposal collapsed within weeks as the government decided regulation—not prohibition—was more practical.

Today, Russia has legalized crypto mining and even permits the use of cryptocurrency for international trade.

Zimbabwe

In May 2018, the Reserve Bank of Zimbabwe (RBZ) banned all banks and financial institutions from processing payments or trading in cryptocurrencies, citing risks of fraud and instability in an economy facing hyperinflation.

The ban was swiftly lifted later that month by a High Court ruling, which deemed it unlawful and restored banking access for crypto firms.

By March 2020, the RBZ announced plans for a formal regulatory framework, which now includes licensing requirements for exchanges and taxation, while continuing to warn the public about volatility.

Bolivia

In 2014, the Central Bank of Bolivia (BCB) issued Resolution No. 044, banning Bitcoin and any unregulated foreign currencies to protect the national financial system from volatility and fraud.

This was reinforced in December 2020 with another resolution prohibiting banks from crypto dealings.

The ban was fully lifted in June 2024 when the BCB authorized financial institutions to process crypto transactions.

Now regulated as non-legal tender assets, with an emphasis on AML compliance, trading volumes surged over 500% following the lifting of the ban, driven by economic pressures such as currency shortages.

India

In April 2018, the Reserve Bank of India (RBI) issued a circular prohibiting banks and regulated financial entities from providing services to cryptocurrency businesses, effectively banning crypto transactions through the formal banking system. 

The ban was lifted in March 2020 when the Supreme Court of India ruled it unconstitutional, allowing banks to resume services for crypto exchanges.

Since then, India has shifted to regulation: cryptocurrencies are legal, but taxed at 30% on gains and 1% TDS on transfers, with ongoing efforts to establish a comprehensive framework under the Financial Intelligence Unit.

Nigeria

In February 2021, the Central Bank of Nigeria (CBN) directed banks to close accounts of crypto traders and prohibit transactions, citing risks of illicit finance and economic volatility. This followed earlier warnings in 2017.

The ban was lifted in December 2023, with the CBN authorizing banks to facilitate crypto transactions via licensed Virtual Asset Service Providers (VASPs).

Regulation now includes SEC oversight, KYC requirements, and anti-money laundering rules; peer-to-peer trading remains restricted but monitored.

Why China’s Mining Ban Failed

China’s renewed hashrate illustrates several structural realities:

• Cheap electricity is hard to regulate. Regions like Xinjiang often produce more energy than they can distribute and consume.

• Mining hardware is portable and easily concealed. Small-scale crypto miners can operate in industrial units, warehouses, or rural areas.

• Bitcoin’s incentives remain powerful. With prices—even after recent downturns—still lucrative, crypto miners find ways to survive.

• Global demand hasn’t slowed. As Bitcoin matures, hashpower becomes more geographically diversified and resilient.

Despite Beijing’s continued skepticism, crypto miners have found breathing room in the cracks of the energy grid.

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