Last September, China seemed to finally be serious about banning cryptocurrencies, leading miners to flee the country for Kazakhstan. Just eight months later, though, things might be changing again.
Research from the University of Cambridge’s Judge Business School shows that China is second only to the U.S. in Bitcoin mining. In December 2021, the most recent figures available, China was responsible for 21% of the Bitcoin mined globally (compared to just under 38% in the U.S.). Kazakhstan came in third.
CoinDesknotes that the rebounding China numbers could be due to miners in that country becoming comfortable that proxy servers are hiding their IP address and allowing them to continue operations in that country without fear of governmental retribution.
Miners in that country also use off-grid electricity to avoid alerting authorities.
Beijing, in announcing the ban last year, said it would examine whether organizations that receive subsidized power from the state—schools, hospitals, community centers, and other public institutions—are involved in crypto mining. If the probes identify violators of China’s crypto mining ban, a government spokesperson said, they would be punished with higher electricity prices.
China’s crackdown on cryptocurrencies last year introduced even more volatility to an unstable market. The government labeled crypto mining as an “extremely harmful” industry that jeopardizes China’s pursuit of carbon neutrality.
China’s not the only company to ban Bitcoin mining. Kosovo is the most recent to prohibit the act. Others include Kazakhstan and Iran.
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