Complete Ban on Virtual Currency Trading in Mainland China
Since September 2021, the People's Bank of China (PBOC) and nine other departments jointly issued a notice, explicitly defining virtual currency-related business activities as illegal financial activities, completely prohibiting services related to virtual currency settlement and providing trader information. This ban covers various virtual currencies such as Bitcoin, Ether, and USDT, emphasizing that they do not have legal tender status and are not permitted to circulate in the market. Overseas virtual currency exchanges providing services to Chinese residents via the internet are also prohibited, with relevant departments strengthening monitoring and pursuing accountability.
Regulatory tightening continued. In December 2025, the People's Bank of China (PBOC) once again emphasized combating illegal financial activities related to virtual currencies and for the first time explicitly clarified that stablecoins also fall under the virtual currency category. In February 2026, the People's Bank of China (PBOC) and seven other departments jointly issued new regulations, reiterating that virtual currencies do not have legal tender status and related business activities are illegal financial activities. The new regulations also emphasized that, without consent, no unit or individual may issue RMB-pegged stablecoins overseas, and domestic units and individuals assisting in the illegal provision of virtual currency services will be held accountable.
Against this backdrop, there are no "legitimate virtual currency trading platforms" in mainland China. Any platform claiming to offer such services is illegal, and participation carries extremely high legal and financial risks. According to the 2026 Global Crypto Adoption Index released by blockchain analytics firm Chainalysis, despite the ban, China still ranks second globally in "on-chain value received from retail addresses," indicating that peer-to-peer virtual currency transfer activities still exist, but their legality and risks should not be overlooked.
Active Support for Blockchain Technology Development in Mainland China
In contrast to the strict prohibition of virtual currency trading, the Chinese government actively encourages the development of blockchain technology. At the national level, blockchain is listed as one of the key industries in the digital economy, actively promoting its progress in technological innovation, application implementation, ecosystem cultivation, and infrastructure construction.
The "14th Five-Year Plan"纲要 explicitly proposes developing blockchain service platforms and encourages their application in fields such as financial technology, supply chain finance, and government services. For example, in January 2022, the Cyberspace Administration of China and fifteen other departments jointly announced a list of national blockchain innovation application pilot projects, covering 16 characteristic areas including manufacturing, energy, government services, rule of law, and trade finance. Beijing also issued the "Beijing Blockchain Innovation Application Development Action Plan (2025-2027)" in June 2025, aiming to enhance original innovation capabilities, build advanced infrastructure, and foster a trusted collaborative ecosystem.
Blockchain industry practitioners generally believe that Web3 is not synonymous with cryptocurrencies, and domestic blockchain development should comply with local laws and regulations and national conditions. The bottom line is to avoid involvement in digital currency speculation and to address compliance obstacles in promotion and payment. Many domestic blockchain projects are committed to providing a "coinless" Web3 experience, avoiding direct use of digital currencies by users through technological innovation.
Risk Warning and Compliance Advice
Virtual currencies possess characteristics such as anonymity, cross-border nature, and detachment from traditional regulatory systems, making them susceptible to use in illegal and criminal activities such as money laundering, fraud, and illegal fundraising, posing a threat to the safety of people's property and national financial order. Experts point out that the global circulation attribute of virtual currencies may bypass the monetary policy transmission of sovereign states and become a vehicle for the import of overseas risks.
Residents in mainland China should strictly abide by local laws and regulations and stay away from any form of virtual currency trading and related illegal financial activities. Individuals and enterprises wishing to understand blockchain technology should focus on its innovative applications in the real economy, rather than virtual currency investment or trading. It is crucial to rely on official announcements and local regulations, carefully verify any information involving virtual currencies, and avoid falling into illegal activities and potential risks.
