Is Crypto Legal In China?

Cryptocurrency transactions are illegal in China following comprehensive bans implemented by the People's Bank of China and nine other central authorities through Circular 237 in September 2021. The circular declares all virtual currency-related business activities illegal financial activities, including exchange services, token issuance, derivatives trading, and cryptocurrency mining (1). Financial institutions, payment companies, and internet firms are prohibited from facilitating cryptocurrency trading, and offshore exchanges are barred from providing services to Chinese residents (1).

China's cryptocurrency crackdown began in December 2013 when authorities mandated that financial institutions could not handle Bitcoin, escalating in September 2017 with a ban on Initial Coin Offerings. The regulatory framework treats virtual currencies as high-risk speculative instruments rather than legal tender or legitimate financial assets (1). Individuals who knowingly assist telecommunications network fraud through virtual currency dealings face criminal liability under Article 287 of China's Criminal Law, while those concealing proceeds of crime through cryptocurrency conversions can be prosecuted under Article 312 (1).

"The e-CNY system aims to create a digital version of the renminbi that meets the public's demand for cash in the digital economy era and will support the development of retail payment infrastructures."

Despite banning private cryptocurrencies, China actively develops its state-controlled Central Bank Digital Currency called the digital yuan or e-CNY. The People's Bank of China inaugurated an international operations center for the e-CNY in Shanghai in September 2025, establishing the currency as legal tender backed by sovereign credit with a two-tier architecture involving authorized commercial banks (2). The e-CNY system prioritizes financial inclusion, payment efficiency, and anonymity for small-value transactions while maintaining traceability for high-value transactions to prevent money laundering and tax evasion (2).

Source:
https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/china
https://www.bis.org/publ/bppdf/bispap123_e.pdf

Last updated: 18-10-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.