Legal Status of Personal Bitcoin Holdings
In mainland China, personal ownership of Bitcoin is generally not considered illegal. Chinese law classifies virtual currencies like Bitcoin as "virtual commodities" or "virtual property," meaning that individuals possessing these digital assets do not inherently violate the law. For example, an article published by the Shanghai Higher People's Court on November 18, 2024, explicitly stated that merely holding virtual currency is not illegal.
Strict Prohibitions on Bitcoin Trading and Related Commercial Activities
Despite personal ownership of Bitcoin not being illegal, Chinese regulators have adopted strict prohibitive policies regarding Bitcoin and other virtual currency trading and related commercial activities. The People's Bank of China (PBOC) and other institutions have repeatedly emphasized that virtual currencies do not possess legal tender status and cannot circulate as currency. The following activities are explicitly identified as illegal financial activities and are resolutely suppressed:
- Exchange between fiat currency and virtual currency.
- Exchange between virtual currencies.
- Buying and selling virtual currencies as a central counterparty.
- Providing information intermediary and pricing services for virtual currency transactions.
- Token issuance financing (ICO).
- Virtual currency derivatives trading.
Furthermore, overseas virtual currency exchanges providing services to residents within China via the internet are also considered illegal financial activities. Participation in virtual currency transactions may involve illegal financial activities, and serious cases may lead to criminal liability. It is worth noting that virtual currency trading contracts are not protected by law, and the consequences and losses arising from investment transactions are borne by the relevant parties themselves.
Restrictions on Financial Institutions and Payment Institutions
To cut off the funding channels for virtual currency transactions, banks, payment institutions, and other financial institutions are prohibited from providing any services for virtual currency-related business activities, including account opening, fund transfers, and clearing and settlement. At the same time, these institutions are also prohibited from issuing and selling virtual currency-related financial products.
Comprehensive Ban on Virtual Currency "Mining" Activities
In addition to trading activities, virtual currency "mining" activities have also been completely banned in mainland China. On September 24, 2021, the National Development and Reform Commission (NDRC) and other departments issued a notice explicitly requiring a comprehensive ban on virtual currency "mining" activities to curb their impact on energy consumption and the environment.
Policy Evolution and Reaffirmation
The Chinese government's regulatory stance on virtual currencies has been consistent and clear. On September 24, 2021, the People's Bank of China (PBOC) and nine other departments jointly issued the "Notice on Further Preventing and Disposing of Risks Related to Virtual Currency Trading and Speculation" (Yinfa [2021] No. 237), comprehensively prohibiting all virtual currency-related trading and speculative activities. On February 6, 2026, the People's Bank of China (PBOC) and seven other departments once again jointly issued the "Notice on Further Preventing and Disposing of Risks Related to Virtual Currencies and Other Matters" (Yinfa [2026] No. 42), further reaffirming and improving the requirements for preventing and disposing of virtual currency-related risks, and clarifying the continued prohibitive policy towards virtual currencies within China.
Market Status and Risk Warning
Due to the aforementioned strict regulatory policies, residents of mainland China can hardly participate in Bitcoin "deposits" or transactions through legal and regulated channels. Although peer-to-peer (P2P) transactions and other forms may exist in gray areas, these trading activities are accompanied by extremely high legal and financial security risks. Users are advised to strictly comply with local laws and regulations and carefully assess risks.
