Canaan’s Japan deal marks first state-linked bitcoin mining project in the country

Canaan inked a deal on Thursday to supply bitcoin mining rigs to a major Japanese utility for a grid-stability research project, marking the country’s first publicly disclosed state-linked mining initiative.

While Canaan did not identify the partner, the move follows earlier reports that Tokyo Electric Power Company (TEPCO), Japan’s largest utility, had previously experimented with bitcoin mining through a subsidiary using surplus renewable energy.

Matthew Sigel, VanEck's head of digital assets, pointed out that all 10 of Japan’s regional utilities have partial government ownership, meaning the new project effectively brings bitcoin mining under state-aligned infrastructure for the first time in the country.

Sigel noted that Canaan’s announcement “adds Japan to our list of countries mining Bitcoin with government resources,” bringing the global count to 11, excluding the United States.

In a follow-up reply on X, he said he couldn’t be certain the deal involved TEPCO but maintained that the project nevertheless qualifies as state-aligned mining activity.

The Asahi Shimbun, one of Japan’s largest national dailies, first reported in September 2024 that TEPCO’s wholly owned subsidiary Agile Energy X had been testing small-scale mining sites in Gunma and Tochigi prefectures to “prevent renewable energy from being wasted.” The company sought to convert surplus solar and wind generation into bitcoin rather than curtail output during periods of low demand.

The Block reached out to TEPCO for comment but did not receive a response by press time.

Canaan said in its Thursday release that its hydro-cooled Avalon A1566HA servers will be used to “stabilize regional power-grid load through controlled overclocking and underclocking,” dynamically adjusting hashrate and voltage to balance energy use in real time. The facility, led by the unnamed major regional utility, is expected to begin operations by the end of 2025.

The company framed the project as part of a broader push into energy-efficient, grid-interactive computing. “Utilities can leverage bitcoin mining as a digital load balancer,” CEO Nangeng Zhang said in the release , adding that Canaan expects to expand similar deployments across Asia, North America, and Europe in 2026.

The initiative also dovetails with Japan’s ongoing digital-asset reforms , which include proposals to reclassify cryptocurrencies as financial products under the Financial Instruments and Exchange Act and introduce a flat 20% capital-gains tax on digital assets.