Cryptocurrency in China: the ban, its limits and Hong Kong
In short. Crypto is banned in China, though the ban is finer-grained than it is usually described. What is unlawful is the activity around a coin — trading, exchange, intermediation and mining — rather than the coin itself. Simply holding is not an offence, and courts have repeatedly treated crypto assets as property. Hong Kong runs its own rules and is not covered by any of this.
- TRADING
- Bannedsince September 2021
- MINING
- Bannedenforcement tightened in 2026
- HOLDING
- Not an offencecourts treat it as property
- YUAN STABLECOINS
- Bannedonshore and offshore alike
- DIGITAL YUAN
- State-runthe only permitted route
- HONG KONG
- Separate regimelicensing and stablecoins
What exactly is banned, and what is not
The ban arrived in stages. In 2013 banks were barred from handling bitcoin. In 2017 token sales were shut down and domestic exchanges pushed out — the firm that would become the world's largest exchange left the country then. In September 2021 a joint notice from several agencies drew the line: any activity involving virtual currencies was declared unlawful financial activity, and foreign platforms serving mainland residents were placed outside the law too. Mining, which had accounted for a large share of global hashrate, was wound up in the same period.
The distinction matters: the prohibition attaches to activity, not to possession. Chinese courts in civil matters have repeatedly proceeded on the basis that a crypto asset is property, hearing cases on inheritance and division of assets. The practical value of that distinction is limited — holding is not an offence, but a trade cannot be enforced in court, because the trade itself is unlawful.
In February 2026 the People's Bank of China and other agencies issued a fresh circular. It extended control to the tokenisation of real-world assets and to yuan-pegged stablecoins, banning their issuance both inside the country and outside it — closing the route through offshore vehicles. Mining enforcement was tightened separately, targeting "shadow" data centres running rigs out of sight.
The state is not rejecting the technology so much as keeping it. The digital yuan, a central bank currency, remains the only sanctioned way to settle in digital money.
Hong Kong: another country inside the same one
Hong Kong is a separate jurisdiction with its own financial law, and the mainland ban does not reach it. Virtual asset trading platforms are licensed there, and since August 2025 it has had a stablecoin ordinance of its own.
The gap is wide enough that Hong Kong is a routine stop for firms shut out of the mainland. The boundary is worth keeping in mind, though: a Hong Kong licence confers no right to serve mainland customers.
Allowed
- Holding crypto — possession alone is not an offence
- Inheriting and dividing it: courts treat it as property
- Using the digital yuan for settlement
- Operating in Hong Kong under a local licence
Restricted
- Trading, exchange and intermediation are unlawful financial activity
- Foreign exchanges may not serve mainland residents
- Mining is banned and shadow data centres are hunted
- Issuing yuan-pegged stablecoins, onshore or offshore
How the rules took shape
Banks are barred from handling bitcoin — the first step towards a ban.
Token sales and domestic exchanges are shut down. Firms move abroad.
A joint agency notice declares all virtual currency activity unlawful. Mining is wound up.
Hong Kong's own stablecoin ordinance takes effect, making the contrast with the mainland plain.
A new circular extends the ban to real-world asset tokenisation and yuan stablecoins, offshore ones included.
Worth knowing
Before the 2021 ban China accounted for up to 75% of global hashrate; that July it fell to almost zero. Two years later underground mining had returned the country to the global top three.
Common questions
Is owning bitcoin illegal in China?
Possession alone is not an offence, and courts in civil matters treat crypto as property. The prohibition covers activity: trading, exchange, intermediation and mining.
Can I use a foreign exchange from China?
No. Since September 2021 foreign platforms serving mainland residents have been unlawful.
Does the ban apply in Hong Kong?
No. Hong Kong is a separate jurisdiction with its own financial law, platform licensing and, since August 2025, a stablecoin ordinance.
Why were yuan stablecoins banned?
The February 2026 circular prohibits issuing them without explicit government approval, including outside the country, to close the offshore route.
What is the digital yuan?
A central bank currency. The state is building it as the only sanctioned form of digital settlement while closing private alternatives.
Sources
Related reading
Other countries
Updated 19.08.2026 · this is reference material, not investment or tax advice