Overview of China's Mainland Virtual Currency Regulatory Policies
Since September 2021, mainland China has implemented a comprehensive and strict ban on virtual currency trading and related businesses. A notice jointly issued by the People's Bank of China and nine other departments explicitly states that all virtual currency-related business activities, including fiat currency-to-virtual currency exchange, virtual currency-to-virtual currency exchange, acting as a central counterparty for virtual currency trading, providing information intermediation and pricing services, token issuance financing, and virtual currency derivatives trading, are deemed illegal financial activities and are strictly prohibited and subject to legal crackdown. This ban also applies to overseas virtual currency exchanges providing services to residents within China via the internet.
Subsequently, the Chinese government continued to strengthen its regulation of virtual currencies. For example, on May 31, 2025, China officially implemented a comprehensive ban on cryptocurrency trading and mining, leading to market fluctuations. On November 28 of the same year, the People's Bank of China led 13 departments in reiterating the illegality of virtual currency-related businesses and for the first time clarified the definition of stablecoins, signaling that regulation would become normalized and institutionalized. Entering 2026, on February 6, the People's Bank of China and seven other departments jointly issued another document, emphasizing that all virtual currency-related business activities are strictly prohibited within the country, and overseas entities and individuals are strictly forbidden from illegally providing such services to domestic entities.
Legal Definition of Personal Holdings and Transactions
Despite the strict prohibition on trading activities, Chinese law takes a different stance on personal holdings of virtual currencies. According to a ruling by the Shanghai Songjiang Court on November 2024, cryptocurrencies are recognized as "virtual property" under Chinese law, meaning that virtual currencies legally held by individuals are protected by law. However, this protection is limited to the holding itself; any form of trading, speculation, or financing through virtual currencies may cross legal red lines and face legal risks.
Overseas Exchanges' Responses and Risks for Mainland Chinese Users
Facing increasingly tightening regulatory policies in mainland China, most overseas virtual currency exchanges have announced their withdrawal from the mainland Chinese market or ceased providing services to mainland Chinese users. For example, mainstream platforms such as HTX, Binance, and OKX successively delisted mainland Chinese users before the end of 2021.
Despite clear official prohibitions, some mainland Chinese users still attempt to participate in virtual currency trading through "workarounds" (such as using VPNs to access overseas platforms, engaging in P2P transactions, etc.). However, these operations carry significant legal and financial security risks, including but not limited to account freezing, fund loss, and potential legal sanctions. Therefore, for mainland Chinese residents, there are currently no legal and regulated channels for virtual currency trading. Investors must confirm local laws and regulations and fully understand potential risks before participating in any virtual currency activities. For related developments, please follow Svmuu's continuous reporting.
