Crypto & Digital Assets · China
Is crypto legal in China? Rules & regulation (2026)
China shaded by its crypto & digital assets status
Crypto is banned in China.
FrameworkPBOC-led Notice No. 42 [2026] (Yin Fa [2026] No. 42) — Notice on Further Preventing and Handling the Risks of Virtual Currency Trading and Real-World Asset Tokenization Speculation, jointly issued 6 Feb 2026 by the People's Bank of China, NDRC, MIIT, MPS, SAMR, NFRA, CSRC and SAFE — superseding the 24 Sep 2021 ten-agency notice. The Renminbi Law and the e-CNY regime designate the digital yuan as the sole legal digital currency on the mainland.
Mainland China imposes a comprehensive prohibition on virtually all cryptocurrency and digital-asset activity. The 2021 PBOC ten-agency notice declared all crypto-related business (trading, brokerage, ICOs, derivatives, matching, mining and services by offshore exchanges to Chinese residents) 'illegal financial activities'; in February 2026 the PBOC-led Notice No. 42 extended the ban to stablecoins and real-world-asset tokenization. Personal holding of crypto is treated by courts as a form of 'virtual property' entitled to civil protection, but any commercial exploitation is unlawful. Hong Kong SAR operates a separate, permissive regime (Stablecoins Ordinance in force 1 Aug 2025) that does not apply to the mainland.
Key points
The 24 September 2021 PBOC-led ten-agency Circular on Further Preventing and Handling the Risks of Speculation in Virtual Currency Trading classifies all crypto-related business — trading, brokerage, ICOs, derivatives, order-matching and services by overseas exchanges to PRC residents — as illegal financial activities; financial institutions and payment providers are barred from any related service.
PBOC Notice No. 42 (Yin Fa [2026] No. 42), issued 6 February 2026 by the PBOC and seven other central agencies, expressly extends the crypto prohibition to offshore/onshore stablecoins (including RMB-pegged) and to real-world-asset (RWA) tokenization unless carried out on approved financial infrastructure with explicit regulatory consent.
The digital yuan (e-CNY) is legal tender with the same status as physical RMB and, from 1 January 2026, is repositioned by the PBOC from 'digital cash' to 'digital deposits' with commercial banks permitted to pay interest on e-CNY holdings — reinforcing the state's monopoly over digital money on the mainland.
Chinese courts (including a widely cited Shanghai Songjiang People's Court ruling and the Supreme People's Court's 2025 'Digital Rule of Law' journal) recognize that individuals may lawfully hold cryptocurrencies as virtual property with civil-law protection, while all commercial and financial activity in crypto remains prohibited.
Under 'One Country, Two Systems', Hong Kong's Stablecoins Ordinance (in force 1 August 2025, administered by the HKMA) licenses fiat-referenced stablecoin issuers with HK$25m minimum capital and 100% reserve backing; this framework does not extend to mainland China, where issuance and use remain prohibited.
There is no dedicated crypto-tax statute; the State Taxation Administration (STA) applies existing Individual Income Tax categories — treating crypto disposals broadly as gains from 'property transfer' (20% flat) or as business/operating income (up to 45% for individuals; 25% enterprise income tax) — while SAFE monitors related cross-border flows. A 2025 Shanghai STA explainer triggered speculation of policy easing but no permissive regime has been enacted.
Timeline - major decisions & events
At a coordination meeting of 13 agencies, the PBOC declared a 'resurgence' of crypto speculation and reaffirmed that all virtual-currency activity, including yuan-pegged stablecoins issued offshore without approval, is illegal, prompting Ant Group and JD.com to halt Hong Kong stablecoin plans. It marks China's strongest public stance since the 2021 ban and consolidates a state monopoly via the digital yuan.
Central Banking ↗The Songjiang District People's Court stated that virtual currency has 'property attributes' and that simply holding it is lawful for individuals, the first clear judicial statement on personal ownership, while reaffirming that token issuance, fundraising, and crypto business activities remain illegal financial activities.
South China Morning Post ↗The NDRC's revised Industrial Structure Adjustment Guidance Catalogue took effect, formally listing 'virtual currency mining' among activities to be phased out, cementing the prohibition begun in 2021 as part of carbon-neutrality goals.
Library of Congress ↗The 'Circular on Further Preventing and Disposing of Speculative Risks in Virtual Currency Trading,' issued by the PBOC with the Supreme People's Court, Supreme People's Procuratorate, Ministry of Public Security and others, deemed all crypto-related business, trading, matching, derivatives, and services by offshore exchanges to mainland residents, illegal financial activity subject to criminal liability. It is the foundation of today's blanket ban.
People's Bank of China ↗The 51st meeting of the State Council's Financial Stability and Development Committee announced a crackdown on bitcoin mining and trading, signaling the escalation that culminated in the September 2021 bans.
CoinDesk ↗After trials launched in mid-2020 in Shenzhen, Suzhou, Chengdu and Xiong'an, the PBOC ran a Shenzhen lottery distributing RMB 10 million in digital yuan to 50,000 citizens, advancing the state-controlled CBDC positioned as the official alternative to private crypto.
South China Morning Post ↗Regulators issued Virtual Currency Exchange Cleanup requirements forcing all bitcoin/crypto trading platforms to halt new registrations and wind down trading services; major venues like BTCC closed, and yuan's share of global bitcoin trading collapsed from over 90% to under 1%.
Library of Congress ↗China - other topics
Crypto & Digital Assets in other countries
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