Overview of Mainland China's Virtual Currency Regulatory Policies
Since September 2021, Mainland China's regulatory stance on virtual currencies has been clear and strict. The People's Bank of China and nine other departments jointly issued a notice explicitly stating that virtual currencies do not possess the legal status of fiat currency, and any business activities related to virtual currencies are classified as illegal financial activities. The notice also comprehensively prohibits overseas virtual currency exchanges from providing services to residents within China via the internet.
This regulatory framework was further reiterated and strengthened on February 6, 2026. The People's Bank of China, the National Development and Reform Commission, and six other departments once again jointly issued a notice, emphasizing that virtual currency-related business activities are illegal financial activities and are strictly prohibited within the country. The notice also explicitly prohibits overseas entities and individuals from illegally providing virtual currency-related services to domestic entities in any form, as well as unapproved domestic entities and their controlled overseas entities from issuing virtual currencies overseas.
Legal Boundaries for Personal Holdings and Transactions
It is worth noting that in judicial practice, the legal status of personal virtual currency holdings has been confirmed in some cases. For example, the Songjiang District People's Court of Shanghai ruled in November 2024 that Chinese citizens can legally hold cryptocurrencies as personal property, classifying them as virtual commodities with property attributes. However, this ruling is limited to the recognition of personal property attributes and does not apply to commercial activities. Any activities involving virtual currency trading, speculation, or financing may still cross legal red lines in Mainland China and constitute illegal financial activities.
Market Impact and Risk Warning
Affected by Mainland China's comprehensive ban on virtual currency trading, there are no legal trading platforms within the country. This move has also had a significant impact on the global cryptocurrency market; for example, after the ban was issued in September 2021, Bitcoin prices once saw a sharp decline. As of February 2026, Bitcoin's price has fallen below the $70,000 mark, a pullback from its historical high in October 2025.
The Chinese government and regulatory authorities believe that virtual currency trading and speculation disrupt economic and financial order, easily breed illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering, posing a threat to national financial security. Experts also point out that the anonymity, cross-border nature, and detachment from traditional regulatory systems of virtual currencies make it difficult to implement compliance requirements such as customer identification and anti-money laundering. If allowed to develop unchecked, it would sow the seeds of systemic financial risks.
Therefore, for global readers, understanding Mainland China's strict regulatory policies is crucial. In some jurisdictions, virtual currency trading may be strictly restricted or even completely prohibited. Please be sure to comply with local laws and regulations and fully recognize the legal and financial risks associated with participating in unregulated virtual currency trading activities.
