Japan is set to launch its first state-backed Bitcoin mining project, employing the technology as an innovative solution to stabilize national power grids and manage surplus renewable energy.
Canaan, a leading manufacturer of Bitcoin mining equipment, recently finalized an agreement with an unnamed Japanese public utility for the initiative. The project is scheduled to begin operations by the end of 2025.
The plan involves deploying hydro-cooled Avalon A1566HA mining servers, which can dynamically adjust their hash rate and voltage. This capability allows the system to function as a “digital load balancer,” absorbing excess energy from renewable sources like solar and wind power in real time.
Nangeng Zhang, Chairman and CEO of Canaan, stated that utility companies can leverage Bitcoin mining as a digital load balancer. He added that this approach enhances both energy sustainability and grid efficiency.
🚨 Japón se une a la minerÃa estatal de Bitcoin 🚨
Canaan firma un acuerdo con una empresa pública japonesa para el primer proyecto estatal de minerÃa de Bitcoin.
Este innovador plan inicia operaciones a finales de 2025 utilizando tecnologÃa que estabiliza la red eléctrica.… pic.twitter.com/d81dpqyscL
— Diario฿itcoin (@DiarioBitcoin) March 12, 2024
While Canaan has not disclosed the name of the public company, reports have previously linked Tokyo Electric Power Company (TEPCO), Japan’s largest utility, to Bitcoin mining tests through its subsidiary, Agile Energy X. In September 2024, the Asahi Shimbun newspaper detailed small-scale experiments in the prefectures of Gunma and Tochigi aimed at converting surplus renewable energy into Bitcoin.
Matthew Sigel, Head of Digital Assets at VanEck, speculated that TEPCO could be involved in the new agreement. He confirmed the project qualifies as state-aligned mining activity.
Sigel noted that this development adds Japan to a growing list of nations mining Bitcoin with government resources. He indicated that Japan joins at least 11 other countries, including Bhutan, El Salvador, and Argentina, in this endeavor.
The 10 largest regional electric companies in Japan have partial government ownership, making this initiative a pioneering public-sector venture.
The agreement coincides with Japan’s ongoing regulatory reforms for digital assets. The nation has reclassified cryptocurrencies as financial products under its Financial Instruments and Exchange Act and applies a 20% flat capital gains tax on digital asset profits.
Canaan intends to replicate this energy management model globally, targeting Asia, North America, and Europe starting in 2026. The company positions Bitcoin mining as an intelligent energy management solution amidst increasing demand for data centers driven by the artificial intelligence boom.
Zhang highlighted a surge in demand for Canaan’s energy-efficient solutions from residential, AI computing, and high-density data centers. He noted these facilities are exerting growing pressure on national electrical systems worldwide.
The Japanese project builds on a similar initiative Canaan supported in the Netherlands last year. The company plans to expand these implementations with global energy and data center partners in 2026.