Made in the USA
Recently, Bitcoin mining company Marathon Digital Holdings announced that it will label each Bitcoin block it mines with the words “Made in the USA.”
The company’s Chairman, Fred Thiel, emphasized on social media: Every block mined by MARA Pool in the United States proudly bears the “Made in the USA” label. We are the only large miner capable of doing this because we operate our own mining pool and ensure that all blocks mined by MARA Pool are produced in the United States. This statement has not only attracted widespread attention within the industry but also revealed the complex global political maneuvering behind virtual currencies.
Marathon Digital Holdings was incorporated in Nevada on February 23, 2010, and is one of the leading Bitcoin mining companies in the United States. The company rose rapidly through advanced hardware equipment and low-cost energy resources, and is known for its strict compliance and security. Since 2021, Marathon Digital has announced that all of its Bitcoin mining operations comply with the regulations of the U.S. Office of Foreign Assets Control (OFAC), which has not only enhanced the company’s market reputation but also increased its brand value. The recent announcement to label each Bitcoin block with “Made in the USA” is not only an attempt by Marathon to shape its brand, but also part of the United States’ efforts to strengthen its dominant position in the global virtual currency market.
Great-Power Competition: Why Has Bitcoin Become a Focus of Attention?
The issue of Bitcoin became one of the focal points in the 2024 U.S. presidential election. Several major candidates expressed support for Bitcoin to varying degrees. Former President Trump explicitly stated that he wants “all remaining Bitcoin to be made in the United States,” and met with executives of multiple Bitcoin mining companies, indicating that the future U.S. government may further promote policy support for virtual currency mining in order to gain an advantage in global fintech competition. This shows that Bitcoin is not merely a symbol of technological and financial innovation, but has also become part of the strategic layout of major powers.
Russia’s Latest Moves also demonstrate the importance major powers attach to Bitcoin. In 2024, Russia formally passed a Bitcoin mining bill, allowing legal Bitcoin mining activities. This bill reflects Russia’s emphasis on virtual currency mining, controlling and leveraging this emerging industry through legalization and regulation, especially in the energy-rich Siberian region, where Russia is actively expanding its Bitcoin mining scale by utilizing its hydropower resources.
More importantly, facing economic sanctions from Western countries, particularly the United States, Russia is under significant pressure from the international payment system. The SWIFT system, dominated by the United States, has restricted Russia’s channels for international financial transactions, marginalizing Russia in the global economy. However, through virtual currencies like Bitcoin, Russia can bypass the restrictions of traditional financial systems and facilitate capital flows in the international market. This makes Bitcoin a form of “digital gold” for Russia under economic sanctions, capable of supporting payments and transactions on a global scale.
The Integration of Strategic, Social, and Economic Value in Virtual Currency Mining appears particularly important against the backdrop of this great-power competition. Possessing the capability for virtual currency mining means that a country can gain greater influence in the global financial system. This is reflected not only in the struggle for financial dominance but also in major powers’ control over energy and technology. The Bitcoin mining process is highly energy-intensive, but this energy consumption is not purely wasteful; it brings significant economic benefits to the host country. Through virtual currency mining, major powers can promote the optimization of energy utilization and technological innovation. For example, U.S. mining companies are actively using renewable energy, which not only improves energy efficiency but also supports grid stability. In contrast, countries such as Russia and Canada, through policy guidance, use virtual currency mining as an important means to enhance their economic and technological strength, thereby occupying a favorable position in the global market.
China May Need to Adjust Its Virtual Currency Mining Policy at an Appropriate Time
While considering virtual currency mining policies, China also needs to re-examine the strategic significance of this industry from the perspective of national financial security. In recent years, many countries and regions around the world have begun to view Bitcoin as an important strategic reserve. For example, El Salvador became the first country to adopt Bitcoin as legal tender and began accumulating a national Bitcoin reserve. In addition, some countries, such as Switzerland, are gradually incorporating Bitcoin into their national reserve assets. This trend shows that Bitcoin, as a digital asset, has been included in the long-term strategic layouts of some countries and regions.
In the future, decentralized virtual assets such as Bitcoin will become an indispensable and significant component of the global digital economy. These digital assets are not merely investment tools but also part of national economic security. If the reserves and control of Bitcoin are left in the hands of Western countries represented by the United States, the global digital economy landscape may tilt further toward these countries in the future. Therefore, China should also consider including Bitcoin and other virtual assets in its national strategic reserve system, similar to the emphasis placed on gold reserves, to ensure that it does not remain passive in global financial competition.
As Attorney Hong Lin previously proposed in the article “Web3 Lawyer: Recommending That the Government Adjust the Ban on Virtual Currency Mining at an Appropriate Time,” in order to promote China’s leading position in the next-generation internet centered on blockchain technology, it may be time for Chinese regulatory authorities to re-examine and adjust the current one-size-fits-all prohibitory regulatory policy on virtual currency mining.
First, shutting down the mining industry will weaken China’s influence in the global blockchain technology and digital currency markets, leading to a significant brain drain of talent with rich experience and skills in high-performance computing, algorithm optimization, and hardware development. China was once the largest Bitcoin mining market in the world. According to Bloomberg data, China’s Bitcoin hash rate accounted for 65% of the global total in 2021, but by 2023, this proportion had dropped to less than 10%. This change has not only caused China to lose its dominant position in the global digital currency market but has also led to the migration of a large number of outstanding talents and enterprises to other countries, such as the United States, weakening China’s technological innovation capabilities and competitiveness in this field and placing China at a disadvantage in future digital economy competition. The development of the mining industry is closely linked to the development of computer hardware, particularly innovations in high-performance computing chips, cooling technologies, and large-scale computing systems. These technologies are widely applied in virtual currency mining and also positively drive other high-tech industries. The government can provide special funds and policy support to promote the research, development, and application of related technologies. For example, establishing special science and technology funds to subsidize enterprises and research institutions in developing high-efficiency, low-energy-consumption mining equipment and technologies.
Second, banning mining not only affects technology and the economy but also results in significant losses in commercial profits. According to media statistics, there were previously 13 A-share listed companies, 7 Hong Kong-listed companies, and 9 Chinese concept stocks involved in virtual currency mining business in China, such as Xinyuan Technology (300472.SZ), Liaoning Interactive (002280.SZ), and Futong Information (000836.SZ). The mining industry once provided substantial employment opportunities and tax revenue for local economies. Regions such as Inner Mongolia, Yunnan, and Sichuan, due to their energy advantages, attracted a large number of mining enterprises, playing a positive role in local economic development. For example, Sichuan ranks first nationwide in both installed hydropower capacity and electricity generation. Promoting the absorption of surplus hydropower has been a problem that the local government has been exploring and solving. Using hydropower for virtual currency mining can create a win-win situation for all parties: stable mining operations for mining farms, absorption of abandoned hydropower by power generation companies, increased grid transmission fee income for power supply companies, and increased fund and tax revenue for local governments.
The losses brought to these regions by the one-size-fits-all mining ban are quite evident. According to a report by the South China Morning Post, the Inner Mongolia region lost thousands of jobs due to the departure of mining enterprises, which also weakened local fiscal tax sources. In contrast, well-known virtual currency mining companies in the United States, such as Riot Blockchain and Marathon Digital Holdings, are listed on the NASDAQ. These companies have obtained substantial profits through mining activities. Riot Blockchain reported total revenue of $213 million in 2022, a year-on-year increase of 65%, and continued to grow to $275 million in 2023. Marathon Digital Holdings’ total revenue reached $250 million in 2022, a year-on-year increase of 75%, and grew to $310 million in 2023. According to CoinDesk data, the stock prices of Riot Blockchain and Marathon Digital Holdings increased by 45% and 60%, respectively, in 2023, demonstrating investor confidence and market recognition of these companies’ prospects. If China can guide the lawful and compliant development of the mining industry, these profits and economic growth could also be realized in China. According to a research report by PwC, China’s potential annual revenue from the virtual currency mining industry could reach billions of dollars, and if combined with clean energy development and technological innovation, the actual economic benefits could be even higher. China can explore models where state-owned enterprises hold controlling or participating stakes in mining companies to ensure that mining activities are conducted under government supervision. Through the participation of local state-owned enterprises, risks can be effectively controlled, while ensuring steady growth in tax revenues and economic benefits.
Furthermore, according to reports from the International Energy Agency (IEA), global Bitcoin mining energy consumption is gradually transitioning toward clean energy. Mining companies in countries such as the United States and Canada are actively adopting renewable energy sources like hydropower and wind power to reduce their carbon footprint and improve energy efficiency. For example, some mining companies in Texas collaborate with power companies to use renewable energy sources such as wind and solar power for mining activities. In addition, the Electric Reliability Council of Texas (ERCOT) allows these companies to reduce electricity consumption during peak demand periods to support grid stability. Quebec, Canada, implements strict energy efficiency standards for high-energy-consuming mining enterprises and encourages them to use clean energy for mining. Hydro-Québec collaborates with mining companies to reduce carbon emissions by providing renewable energy electricity. This trend indicates that through reasonable policy guidance and regulation, a win-win situation for virtual currency mining and environmental protection can be achieved. The government can formulate clear policies to guide the mining industry toward green and energy-saving development, while strengthening supervision of mining activities to prevent illegal activities. Through a reasonable regulatory framework, industry behavior can be standardized while avoiding the negative impacts of a complete ban. For example, the government can require mining companies to use a certain proportion of renewable energy, promoting the development of green energy and improving overall energy efficiency, while strictly penalizing companies that violate regulations.
By referencing the successful experiences of other countries, China can explore reasonable policies and regulatory frameworks to promote the healthy development of the virtual currency mining industry, achieving comprehensive benefits in technological progress, economic growth, and environmental protection.
Conclusion
Virtual currency mining is not only a technical issue but also a complex topic involving global politics, economics, and energy. The strategic layout of major powers in this field not only reflects the struggle for financial dominance among nations but also reveals the important status of virtual currencies in the future global economy. For China, adjusting mining policies at an appropriate time can not only promote the development of domestic blockchain technology but also enhance China’s influence and voice in the global virtual currency market. We look forward to more industry professionals and research institutions engaging in in-depth discussions on the regulatory policies for virtual currency mining, jointly providing scientific and reasonable policy recommendations for China’s digital economy development.
Special Disclaimer:
This article is an original work of Mankun Law Firm and represents only the personal views of the author. It does not constitute legal consultation or legal advice on specific matters.
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