China Reaffirms Crypto Ban Amid Resurgent Speculative Trading

The People’s Bank of China (PBOC) has issued a stark reaffirmation of the nation’s comprehensive ban on virtual currencies, stating they “do not have the same legal status as legal tender” and that all related business activities are illegal. This declaration followed a high-level meeting involving a powerful coalition of government bodies, including the Ministry of Public Security, the Cyberspace Administration of China, and the Supreme People’s Court. The move signals a coordinated, multi-agency effort to suppress crypto activity, underscoring Beijing’s view that such transactions are destabilizing to financial stability.

This latest push is not a new policy but a vigorous reinforcement of measures first established in 2021. At that time, a sweeping crackdown led to the shuttering of domestic cryptocurrency exchanges and the forced exodus of China’s once-dominant Bitcoin mining industry. The PBOC claims these earlier actions successfully “rectified the chaos in the virtual currency market.” The current campaign represents a direct response to what officials describe as a resurfacing of speculative crypto activity, presenting fresh challenges for national financial risk control.

To enforce the ban, Chinese authorities deploy a layered strategy targeting both access and information. Technically, access to foreign cryptocurrency exchanges is restricted through the national firewall, while domestic app stores flag offshore trading applications as high-risk. Financially, banks and payment institutions are strictly prohibited from processing any transactions linked to virtual currencies.

The crackdown extends deeply into the digital public sphere. Major short-video and lifestyle platforms like Douyin, owned by ByteDance, and Xiaohongshu (Rednote) have expanded their moderation to remove investment-related and crypto-promotional content. This digital censorship is complemented by persistent state-media campaigns warning the public about the risks of fraud and speculation inherent in cryptocurrency markets. According to Lacie Zhang, a research analyst at Bitget Wallet, this combination of “technical blocks, financial restrictions, platform moderation and public-risk campaigns” has been effective in reducing formal, visible onshore participation.

Despite the formidable regulatory wall, underlying demand for cryptocurrencies in China remains significant. Estimates from crypto-focused media company CoinLaw.io suggest China still had approximately 59 million cryptocurrency users in 2025, representing 8–10% of the global user base. This figure highlights the core challenge for regulators: while they can suppress visible, onshore activity, they cannot entirely eliminate interest.

The result, as analyst Zhang notes, is a market where activity has not vanished but migrated. “Together, these measures reduce visible on-shore participation while leaving some activity to migrate to offshore or less transparent channels,” she explained. Chinese users have increasingly turned to offshore trading platforms, cross-border peer-to-peer markets, and decentralized financial (DeFi) tools that are harder for authorities to monitor and intercept. This creates a distributed, opaque shadow market that persists beneath the surface of the official ban.

The situation presents a paradox for Beijing. On one hand, its policies have successfully cleared the formal domestic market of exchanges and miners, achieving a key regulatory objective. On the other, they have fostered a resilient, decentralized ecosystem of users operating in legal grey zones. The renewed warnings from the PBOC and its partner agencies suggest that containing this persistent, offshore-leaning activity—especially involving assets like stablecoins which mimic traditional currency functions—remains a top and ongoing priority for China’s financial stability guardians.