Chinese Crypto Ban

Extracted Attributes

• Legal Status

  Illegal financial activity

• Primary Regulators

  People's Bank of China (PBoC), China Securities Regulatory Commission (CSRC), State Administration of Foreign Exchange (SAFE), Ministry of Public Security

• Scope of Prohibition

  ICOs, cryptocurrency trading, mining, RWA tokenization, and offshore Renminbi-linked stablecoins

• Impacted Asset Classes

  Cryptocurrencies (e.g., Bitcoin), Stablecoins, Tokenized Real-World Assets (RWA)

Timeline

• China officially bans Initial Coin Offerings (ICOs) and domestic cryptocurrency exchanges. (Source: Web Search Results)

  2017-09-04

• Binance relocates its operations from China to Tokyo following the domestic ban. (Source: c84b95ee-214b-4e24-b48a-09ad00fb592f)

  2017-10-01

• Chinese officials announce a ban making it illegal for any institution to deal in crypto for payments or remittances. (Source: Web Search Results)

  2021-05-18

• The PBoC and other agencies issue a notice classifying all virtual currency-related business as illegal financial activities. (Source: Web Search Results)

  2021-09-24

• The People's Bank of China reaffirms its hardline stance and commitment to maintaining the prohibition on digital currencies. (Source: Web Search Results)

  2025-12-01

• A joint notice is published explicitly banning unapproved Renminbi-linked stablecoins and Real-World Asset (RWA) tokenization. (Source: Web Search Results)

  2026-02-06

Cryptocurrency

A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. However, a type of cryptocurrency called a stablecoin may rely upon government action or legislation to require that a stable value be upheld and maintained. Individual coin ownership records are stored in a digital ledger or blockchain, which is a computerized database that uses a consensus mechanism to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership. The two most common consensus mechanisms are proof of work and proof of stake. Despite the name, which has come to describe many of the fungible blockchain tokens that have been created, cryptocurrencies are not considered to be currencies in the traditional sense, and varying legal treatments have been applied to them in various jurisdictions, including classification as commodities, securities, and currencies. Cryptocurrencies are generally viewed as a distinct asset class in practice. The first cryptocurrency was bitcoin, which was first released as open-source software in 2009. As of June 2023, there were more than 25,000 other cryptocurrencies in the marketplace, of which more than 40 had a market capitalization exceeding $1 billion. As of April 2025, the cryptocurrency market capitalization was estimated at US$2.8 trillion.

Web Search Results

• Cryptocurrency regulation and market quality

  On May 18, 2021, Chinese officials announced a ban making it illegal for any institution to deal in crypto for payments, remittances or anything else. The conversion between crypto and the Chinese Yuan was also banned. Many consider this crackdown as one of the most extensive and significant in crypto history. It ‘greatly expanded the scope’ of the regulations issued during the 2017 ban.6 Two of the largest crypto miners in the world immediately announced their exit from China the day after the announcement of this ban. Given the significance of the Chinese crypto market, this ban provides a unique opportunity to study the implications of a crypto regulation, as well as the market dynamics when a significant portion of a financial marketplace is extensively limited or practically closed [...] of the 2021 Chinese crypto ban from an environmental perspective. Data pertaining to the crypto carbon footprints also provide evidence on the lack of long-term effectiveness of a crypto ban, even when the enforcement measures are as stringent as the regulation studied in our paper. [...] We examine the effects of the 2021 Chinese cryptocurrency ban on several aspects of crypto market quality, namely, prices, volatility, and liquidity. We find that average crypto prices plunge and liquidity deteriorates, while volatility spikes in response to the announcement of the ban. While the volatility surge is short-lived, the fall in crypto values and liquidity persists. The results are robust across dollar trading volume sorts, and remain significant after taking into account the inter-connectedness between the market quality measures in a vector autoregressive framework. We present the results in comparison with the 2017 Chinese cryptocurrency ban, which did not result in the same broad changes in the crypto market. We also discuss the potential household ownership and

• Is Crypto Legal in China? Regulations & Compliance in 2025

  Chinese regulations, particularly a 2017 ban on initial coin offerings and a comprehensive 2021 notice, have effectively outlawed cryptocurrency exchanges from operating within the country. This prohibition classifies all virtual currency-related business as illegal financial activities and explicitly extends to overseas exchanges that provide services to Chinese residents, holding their domestic staff and partners legally accountable. Are there penalties for using cryptocurrencies in China? Yes, China deems all cryptocurrency-related business activities as illegal financial activities. If these actions constitute a crime, they are subject to criminal prosecution, and any related civil legal actions are considered invalid, with investors bearing any losses themselves. ‍ ‍ [...] China Securities Regulatory Commission (CSRC): As the nation's securities watchdog, the CSRC focuses on preventing illegal public offerings through digital tokens. It plays a crucial role in enforcing the ban on Initial Coin Offerings (ICOs) and other forms of token-based fundraising. State Administration of Foreign Exchange (SAFE): This authority monitors and regulates all cross-border financial flows, specifically targeting overseas crypto exchanges that provide services to Chinese residents. It works to prevent the use of cryptocurrencies for capital flight and to enforce the ban on foreign crypto platforms. [...] ## Why this matters for Cross-Border Payments China's strict ban on cryptocurrency creates significant hurdles for international businesses, as digital assets cannot be used for cross-border payments into or out of the country. This forces companies to rely exclusively on traditional banking channels, which can be slower and more expensive, complicating trade and investment with Chinese partners. Key pain points include the inability to leverage crypto for fast, low-cost remittances, exposure to currency conversion fees, and the risk of payment delays due to stringent capital controls. ## How Lightspark Enables Compliant Crypto-Native Payments

• China clarifies enhanced crypto ban, rules on stablecoins, RWAs

  “Recently, speculative activities related to virtual currencies and the tokenization of real-world assets (RWA) have occurred frequently, disrupting economic and financial order and endangering the property safety of the people,” read the notice. “Virtual currency-related business activities constitute illegal financial activities.” This reiterates China’s long-standing ban on digital assets, which has been in place since 2021, when the People’s Bank of China (PBoC), along with a number of government departments, jointly issued the first “notice on further preventing and disposing of the risk of virtual currency trading speculation.” [...] “Conducting real-world asset tokenization activities within China, as well as providing related intermediary and information technology services, which are suspected of involving illegal token issuance, unauthorized public offerings of securities, illegal operation of securities and futures businesses, illegal fundraising, or other illegal financial activities, should be prohibited,” read the statement. It further clarified that “foreign entities and individuals are prohibited from illegally providing real-world asset tokenization-related services to domestic entities in any form.” These updates clear up any ambiguity regarding China’s stance on stablecoins and tokenized RWAs, growing sectors that may have thought there was some leeway under the country’s digital asset ban. [...] In December 2025, the PBoC reaffirmed its hardline stance on the digital asset sector, committing to maintaining China’s prohibition on digital currencies while highlighting stablecoins as a particular concern. On this latter topic, the latest notice, published February 6, clarified and expanded on the country’s stablecoin stance, making a ban on unapproved yuan-linked stablecoin issuance explicit. “No entity or individual, whether domestic or foreign, may issue stablecoins pegged to the Renminbi overseas,” according to the notice. The other major clarification in the statement related to RWA tokenization activities, on which the authorities also clamped down.

• China Reiterates Crypto Ban While Cracking Down on Tokenized ...

  China just reminded the global market that its door to cryptocurrency remains firmly shut. In a coordinated move involving the central bank and law enforcement, Beijing has expanded its longstanding crypto prohibition to specifically target two growing sectors: Real-World Asset (RWA) tokenization and offshore stablecoins pegged to the Chinese yuan. DISCOVER: Best New Cryptocurrencies to Invest in 2026 While the country has technically banned crypto trading since 2021, this new directive closes specific loopholes that investors have used to trade in digital assets abroad. For beginners, this serves as a reminder that regulatory risks can vary wildly depending on where you and the projects you invest in are located. [...] While the rest of the world sees RWA as a major opportunity to make finance more efficient, Chinese regulators see it as a threat to financial stability. The ban also targets yuan-linked stablecoins. Beijing is fiercely protective of its national currency and views unauthorized digital versions of the yuan as a direct challenge to its monetary sovereignty. ## ‘Same Business, Same Risk, Same Rules’ On Friday, the People’s Bank of China (PBOC), along with the Ministry of Public Security and other top agencies, released a joint notice declaring these activities illegal. The message was clear: speculative activity tied to virtual currencies disrupts the financial order. [...] The directive applies a strict principle of “same business, same risk, same rules.” This means that even if a company operates “offshore” (outside of mainland China), it cannot issue tokens representing domestic Chinese assets or the yuan without explicit government approval. According to The Block, the notice states: “Without approval… no entity or individual, inside or outside China, may issue offshore stablecoins pegged to the renminbi.” This effectively blocks foreign entities from creating crypto products that track the Chinese economy for Chinese users. It is a significant escalation aimed at preventing capital flight and maintaining tight control over the nation’s financial system. DISCOVER: Top 20 Crypto to Buy in 2026 ## What This Means For the Crypto Market

• China Reinforces Crypto Ban, Maps Rules for Real-World-Asset ...

  Caixin Caixin Global – Latest China News & Headlines # China Reinforces Crypto Ban, Maps Rules for Real-World-Asset Tokens The regulatory reinforcement follows a surge in market discussion about virtual assets in the second half of 2025. Chinese regulators have tightened the country’s sweeping ban on cryptocurrencies and, for the first time, outlined a regulatory framework for the tokenization of real-world assets, signaling a more proactive approach to managing risks from emerging financial technologies.