China Curated

DeFi Intel Research Desk2026-07-14Asia

Is crypto legal in China? (2026)

No — cryptocurrency is banned in China. Current status: Banned — trading, payments, issuance. Oversight sits with People's Bank of China (PBOC). Full details — governing law, licensing, tax and dated enforcement history — follow below (last reviewed 2026-07-14).

Framework: 2021 Notice on Further Preventing and Handling the Risks of Virtual Currency Trading Speculation; 2026 Notice on virtual-currency and RWA-tokenization activities (Yin Fa [2026] No. 42).

The perimeter of the ban was fixed on 15 September 2021, when the PBOC and nine other central authorities — including the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and the State Administration of Foreign Exchange — issued a circular declaring all virtual-currency-related business activities "illegal financial activities". That covers fiat-to-crypto exchange, crypto-to-crypto trading, acting as a central counterparty, matching and order-book services, token issuance (ICOs) and crypto derivatives. The notice also reaches offshore: foreign exchanges serving mainland residents over the internet are engaged in illegal financial activity, and banks and payment institutions are barred from providing accounts, settlement or clearing for any of it. A parallel September 2021 campaign led by the National Development and Reform Commission ordered the phase-out of crypto mining.

What the ban does not cover is bare personal holding. In a November 2024 commentary accompanying a civil judgment, a judge of the Shanghai Songjiang People's Court wrote that it is not illegal for individuals merely to hold cryptocurrency, which Chinese courts treat as a virtual commodity with property attributes. The criminal courts have gone further: on 28 April 2025 the Licang District People's Court in Qingdao convicted a man of theft for stealing 107 BTC by memorising most of an acquaintance's seed phrase, sentencing him to 10 years and 9 months; the Qingdao Intermediate People's Court upheld the verdict on 10 November 2025, and the Supreme People's Procuratorate published the case as guidance that Bitcoin meets the criminal-law definition of property. Holding is thus judicially protected property — while every commercial channel for acquiring, trading or cashing it out remains illegal.

The ban hardened again in 2026. On 6 February 2026 the PBOC and seven other agencies (NDRC, MIIT, Ministry of Public Security, SAMR, NFRA, CSRC and SAFE) issued Notice Yin Fa [2026] No. 42, barring any person — domestic or overseas — from issuing renminbi-pegged stablecoins without approval and treating unapproved real-world-asset (RWA) tokenization and related services as illegal financial activity. The notice followed an abrupt policy reversal: after mid-2025 reports that Beijing was weighing yuan stablecoins to internationalise the currency, the PBOC and the Cyberspace Administration of China told Ant Group and JD.com in late 2025 to shelve their Hong Kong stablecoin plans, and regulators asked major brokerages to pause RWA-tokenization work and stablecoin-friendly research.

Hong Kong contrast. Hong Kong SAR runs a deliberately opposite regime (see /jurisdictions/hk/): SFC-licensed virtual-asset trading platforms operate legally, and the Stablecoins Ordinance in force since 1 August 2025 lets the HKMA license fiat-referenced stablecoin issuers, with 100% reserve backing, par-value redemption within one business day, and retail offering restricted to licensed channels. Notice No. 42 reaches the offshore branches of mainland firms, so mainland-owned groups need Beijing's approval before using Hong Kong's regime — the two systems diverge by design.

e-CNY status. The state alternative is the digital yuan. The PBOC's Digital Currency Institute launched an e-CNY International Operation Center in Shanghai in September 2025 (cross-border payment, blockchain-service and digital-asset platforms), complemented by a Beijing operations-management center announced by Governor Pan Gongsheng in October 2025. An action plan announced on 29 December 2025 and effective 1 January 2026 requires banks to pay interest on real-name e-CNY wallet balances, shifting the CBDC from cash-like to deposit-like money. The PBOC reported 3.48 billion cumulative e-CNY transactions worth about ¥16.7 trillion (≈US$2.37 trillion) through November 2025, and in June 2026 onboarded 26 financial institutions — including Standard Chartered China and Chinese banks' branches in Thailand, Singapore, Laos and Qatar — as direct participants in the upgraded cross-border settlement platform.

Tax treatment

There is no crypto tax regime, because the taxable activity itself is prohibited: mainland residents cannot legally trade, and mining was outlawed in September 2021. Court rulings recognising crypto as property in theft and contract disputes have not created any assessment framework for gains. Hong Kong SAR taxes digital assets separately under its own rules (see /jurisdictions/hk/).

• Capital-gains rate (general): N/A — trading prohibited
• Holding-period rule: N/A

Travel rule applicability

Status: not applicable — no lawful VASP sector. FATF Recommendation 16 presupposes licensed virtual-asset service providers; since the 2021 notice makes all VASP activity illegal on the mainland, there is no travel-rule regime to comply with. Crypto-linked AML enforcement instead runs through criminal law, chiefly prosecutions of USDT-based underground banking and illegal foreign-exchange operations (see below).

Notable enforcement actions

• Sept 2021. PBOC and nine other authorities declare all crypto-related business activities illegal financial activity, extending liability to offshore exchanges serving mainland residents.
• May 2024. Chengdu police announce the dismantling of a ¥13.8 billion (≈$1.9B) underground bank that used USDT to move funds offshore — 193 suspects arrested across 26 provinces and ¥149 million frozen.
• 2025. A Beijing court sentences five people to prison over ≈$166 million (≈¥1.2B) of cross-border USDT transactions that bypassed SAFE-regulated banking channels; prosecutors have brought dozens of similar cases since 2024.
• Apr–Nov 2025. Qingdao courts convict and, on appeal, uphold a 10-year-9-month sentence for the theft of 107 BTC; the Supreme People's Procuratorate publishes it as a guiding case treating Bitcoin as legally protected property.
• Feb 2026. PBOC and seven agencies issue Notice No. 42, banning unapproved yuan-pegged stablecoins onshore and offshore and outlawing unapproved RWA tokenization.

Public licensed CASP list

None exists — mainland China licenses no crypto-asset service providers, and no register will appear while the 2021 notice stands. The nearest licensed venue is Hong Kong SAR, whose SFC publishes a public list of licensed virtual asset trading platforms and whose HKMA licenses stablecoin issuers under the 2025 Stablecoins Ordinance.

Comparison to neighbours

Compare China crypto regulation with three geographically adjacent jurisdictions:

Doing business in China — practical notes

Operating any cryptoasset business serving mainland Chinese residents is illegal, wherever the operator is incorporated. Foreign exchanges are blocked at the Great Firewall level, and banking access for crypto is impossible domestically — the 2021 notice obliges banks and payment institutions to refuse and report crypto-linked flows. Since Notice No. 42 (February 2026), issuing a CNY-pegged stablecoin offshore without approval is also illegal, a rule aimed squarely at Hong Kong and Singapore issuance structures; mainland-owned groups should assume prior Beijing sign-off is required before touching stablecoins or RWA tokenization anywhere. The only officially sanctioned digital-currency rails are the e-CNY and the bank-run pilot platforms around it. Enforcement risk concentrates on OTC dealing, USDT-based settlement and cross-border FX evasion, which are prosecuted as illegal business operations or money laundering.

Methodology and sources

This profile was researched and updated by DeFi Intel's research desk on 2026-07-14 from the primary and secondary sources listed below. Claims that could not be verified against a source are omitted or marked pending — we do not republish unverified third-party datasets. Submit corrections and primary-source links to research@defi-intel.com.

Sources

• Library of Congress — China: central bank circular declares crypto transactions illegal (Sept 2021)
• CryptoSlate — PBOC Virtual Currency and RWA Notice Yin Fa [2026] No. 42
• Cointelegraph — PBOC bans unapproved yuan-pegged stablecoins and RWA issuance (Feb 2026)
• The Block — Beijing halts Ant Group and JD.com Hong Kong stablecoin plans (2025)
• SCMP — Shanghai court says personal crypto ownership legal (Nov 2024)
• Cointelegraph — Qingdao 107 BTC theft case; SPP treats Bitcoin as property (2025)
• The Block — Chengdu $1.9B USDT underground banking bust (May 2024)
• Blockchain.News — Beijing court jails five over $166M USDT operation (2025)
• People's Bank of China — e-CNY International Operation Center launched in Shanghai (2025)
• Johnson Stokes & Master — new e-CNY framework, interest-bearing wallets from 1 Jan 2026
• SCIO — 26 financial institutions join e-CNY cross-border platform (June 2026)
• HKMA — regulatory regime for stablecoin issuers (in force 1 Aug 2025)