Cryptocurrency and China: Analyzing China’s Historic Cryptocurrency Activity Amidst Government Crackdowns

China’s cryptocurrency industry and user base are among the most active and influential in the world. Miners from China have historically been dominant, at times controlling as much as 65% of global hashrate. However, China’s status as a cryptocurrency superpower could now be in question. The Chinese government is cracking down on traditional, decentralized cryptocurrencies as it seeks to launch its own Central Bank Digital Currency (CBDC), the digital yuan.

In this report, we use historical blockchain data, open source research, and interviews with experts to shed light on China’s cryptocurrency strategy and explore how its place in the wider cryptocurrency ecosystem may be changing. Chainalysis covers:

• China’s historical mining activity and cryptocurrency transaction volume, both legal and illicit
• The effects and potential motivations of the recent crackdown
• The current status and possible goals of China’s digital yuan project