China's Cryptocurrency Ban: Current Regulations and Enforcement in 2026

In 2014, China was one of the world's largest Bitcoin mining hubs. Today, simply owning Bitcoin there is illegal. This dramatic shift didn't happen overnight-it was a decade-long crackdown that now leaves zero room for China's cryptocurrency ban within China's borders. As of June 2025, China's Cryptocurrency regulations in Chinacomprehensive legal framework that prohibits all cryptocurrency activities has reached its strictest form, banning everything from trading to mining.

Current Legal Status: Zero Tolerance for Crypto

As of June 1, 2025, China's comprehensive cryptocurrency ban makes every form of cryptocurrency activity illegal. This includes holding, trading, mining, or using digital assets for payments. The ban applies to both individuals and businesses, regardless of nationality. Financial institutions and payment processors are strictly prohibited from offering any services related to cryptocurrencies. Even foreign nationals visiting China must comply with these rules. Courts consistently rule against any claims related to crypto assets, considering them void under Chinese law.

From Enthusiasm to Complete Ban: A Decade of Regulatory Shifts

China's journey with cryptocurrency began with open curiosity. In 2013, the People's Bank of ChinaChina's central bank responsible for monetary policy and financial regulation allowed Bitcoin transactions but warned about risks. By 2017, authorities banned ICOs and shut down domestic exchanges. However, mining continued. Then in September 2021, China declared all crypto transactions illegal. The final blow came in June 2025 with Circular No. 237, which explicitly prohibited all activities including trading, mining, and ownership. This complete ban replaced previous partial restrictions, showing a clear escalation in regulatory pressure. The government's message was unambiguous: no room for private digital currencies.

What Happens If You Break the Rules?

Violating China's cryptocurrency ban carries serious consequences. Administrative penalties include fines, asset seizures, and business license revocations. For severe cases-like large-scale trading or money laundering-criminal charges can lead to imprisonment. Authorities actively monitor and shut down operations. In 2025 alone, over 10 cryptocurrency exchanges withdrew from China. Any financial gains from crypto activities are considered illicit proceeds and confiscated. Even attempts to recover lost funds from scams are denied in court, as the underlying transactions are deemed illegal. Foreigners aren't exempt-anyone in China must follow these rules.

The Government's Reasoning Behind the Ban

China's strict stance stems from three main concerns. First, financial stability: authorities fear unregulated crypto could destabilize the economy. Second, money laundering risks: the anonymous nature of digital assets makes them attractive for illegal activities. Third, maintaining control over the financial system. The government sees decentralized cryptocurrencies as a threat to its ability to manage monetary policy. This is why it's pushing the digital yuan (e-CNY)China's central bank digital currency, developed as a state-backed alternative to private cryptocurrencies as a state-controlled alternative. Officials repeatedly emphasize that blockchain technology is welcome, but private cryptocurrencies are not.

Supporting Blockchain While Banning Crypto

China makes a sharp distinction between blockchain and cryptocurrency. The government actively supports blockchain technologya distributed ledger system used for transparency and efficiency development as a tool for transparency and efficiency. It funds research, promotes enterprise blockchain projects, and uses the technology for supply chain management and government services. Meanwhile, cryptocurrencies are viewed as speculative and risky. This split is clear in official statements. For example, the Shanghai Data Exchangea state-owned platform for data asset trading issued the first data asset-backed financing instrument (RDA) in November 2024-but this was a regulated blockchain application, not a cryptocurrency. The message is consistent: "Blockchain yes, crypto no."

Hong Kong's Unique Approach Within China

While mainland China enforces a total crypto ban, Hong Konga special administrative region of China with distinct financial regulations operates under different rules. In May 2025, Hong Kong passed the Stablecoin Billlegislation regulating stablecoin issuance and trading in Hong Kong, creating a regulated framework for stablecoins. This makes Hong Kong a global leader in stablecoin regulation. However, this doesn't mean crypto is legal in Hong Kong-only that stablecoins are now subject to specific rules. The mainland government still controls Hong Kong's financial policies, but the region maintains some autonomy. This shows China's nuanced approach: strict in the mainland, but allowing limited flexibility in special administrative regions.

Will China Ever Lift the Ban?

Don't expect China to reverse its cryptocurrency ban anytime soon. The government's commitment to the digital yuan and centralized financial control shows no signs of weakening. With the ban in place since 2025, regulators have reinforced their stance through consistent enforcement. Any future changes would likely focus on expanding the digital yuan's use rather than reintroducing private cryptocurrencies. For now, China remains one of the world's strictest jurisdictions for cryptocurrency activity.