A recent Cambridge report confirms that the United States is now leading the global exploitation of Bitcoin, which has prompted questions about how China will react. Although the country has long taken an anti-Crypto position, the Chinese mining pools have historically controlled a substantial part of the global Hashrate of Bitcoin.
The current competitive advantage of the United States and renewed hostility on commercial policy could motivate China to summarize. Beincrypto spoke with representatives of the Pieces and Wanchain office to understand what could encourage China to change its position to digital assets.
The United States exceeds China as a top bitcoin mining hub
The United States has firmly imposed itself as the largest mining center in Bitcoin in the world. A recent report by Cambridge Center for Alternative Finance (CCAF) revealed that the United States represents 75.4% of the declared hashrate.
This new development confirms a notable reversal of power over the domination of Bitcoin exploitation. China has become the main mining nation of Bitcoin in the world in 2017, taking advantage of its vast mining infrastructure and its low electricity costs to contribute to more than 75% of the world hash at a given time.
However, the country would later retract industry.
China’s cryptography repression
In 2019, the National Commission for China Development and Reform (NDRC) reported its intention to prohibit the exploitation of cryptocurrencies by publishing a bill categorizing it as a “undesirable industry”.
Two years later, at least four Chinese provinces began to close the mining operations. These repressions intensified in the midst of concerns concerning excessive energy consumption.
Towards the end of 2021, the government declared all the transactions linked to the crypto, further strengthening the prohibition and prohibiting exchanges abroad from serving Chinese citizens.
However, China has a proven ability to adapt to geopolitical changes that could compromise its economic domination, and the current environment can present such a challenge.
Did Bitcoin extraction in China really stop?
Even with the official position of China towards the crypto, mining activity did not stop in the region. In July 2024, Bitcoin Environmental Impact Daniel Batten analyst said the hashrate in China is currently around 15% of the world total.
“Despite the official ban, the infrastructure is already in place: from offshore exploitation to cross-border shopping centers. With more global momentum behind the adoption of cryptography and the United States taking the lead, China can find itself encouraged to look more strategically, even if it is unofficially”, Nic Puckrin, co-founder of the Bureau area, was said to be Beincry.
China also has a geographical advantage over the United States, in particular with regard to technological progress.
The extraction of crypto, in particular for cryptocurrencies of evidence of work such as bitcoin, depends on the integrated circuit equipment specific to the application (ASIC) to manage the complex calculations necessary for validation and mining.
China’s position as the first exporter of cryptographic mining equipment, especially in the United States, gives it a potential advantage if it decides to rekindle its mining sector.
The dispute of the price of course between the two nations adds a layer of uncertainty to long -term profitability of American mining operations.
Puckrin believes that the combination of commercial friction and the unvigorated thrust of the United States for the domination of cryptography could be sufficient to ensure that China reconsidering its position.
“It is unlikely that China will make a public turnover on its ban on extraction and negotiation of crypto as soon as it is. However, with American minors representing proportions of rise and higher of Bitcoin hashrate, China is necessarily to pay attention and could well calmly reassess its position,” said Puckrin to Beincrypto.
However, China has strategies beyond the restart of its Bitcoin mining industry to undermine the domination of the United States.
Nuanced approach to China beyond American influence
Even if China is opposed to the generalized use of cryptocurrencies at the national level, it can always see the value of digital assets to counterbalance the global monetary domination of the US dollar.
Several countries of the world have adopted or envisaged digital currencies from the Central Bank (CBDC) to strengthen their national currencies. China is at the forefront of these developments.
“Despite the ban on bitcoin extraction, China has actively participated in the space of digital assets, thanks to initiatives like CDBC Research and the Digital Yuan, or E-CNY,” Wanchain CEO, Tamujin Louie, said in Beincrypto.
In fact, China’s efforts to create a digital yuan are partly motivated by its desire to relax its economy and reduce its dependence on the US dollar.
Louie also suggested that whatever the movement of China, this will not only base its decision on what the United States does or do not.
“As always, with China, a nuanced approach is the best. Not all policy changes will be due to American prices. Rather, China’s decisions will be informed by world market trends and the own interior strategy of China,” added Louie.
That said, China’s decisions concerning digital currency will in turn affect the way its position on the crypto continues to develop.
“The weakening of the domination of the USD, whether exacerbated or caused by President Trump’s approach to the prices, can encourage China to be more aggressive in [its]Efforts to internationalize the Yuan, including the Digital Yuan, or E-CNY. Any change in the wider strategy of China will be reflected in [its] position towards crypto, ”he concluded.
China’s activity in other areas of international trade already proves how its policy changes tend to be nuanced.
Could the contradictory cryptographic policies of China point out a change?
Aside from its appreciation of digital currencies like E-CNY, the position of China on the crypto has already proven somewhat contradictory. These differences can fuel the conviction that the country could be willing to return – or at least to soften – its total ban on mining.
A month ago, the investment company Vaneck confirmed that China and Russia – two countries particularly overwhelmed by American sanctions – would regulate some of their energy transactions using Bitcoin.
“With the US dollar increasingly used as a political lever, especially in pricing economies – other nations actively explore alternatives.
According to Puckrin’s analysis of these indicators, “the economy of ghost cryptography” of China should develop this year, which could lead to a reaffirmation of its power. This resurgence would be mainly in response to the efforts of denollarization, rather than a reaction to American domination in mining.
We will probably see this activity accelerating in the near future, especially since more and more countries use the crypto to bypass the systems dominated by the dollar, “he concluded.
He will remain crucial to interpret the intentions of China, in particular with regard to cryptocurrency, by observing his actions rather than trusting his official declarations.
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