Cryptocurrency Regulations and Laws in China
Learn about China’s cryptocurrency regulations. Discover why crypto trading and mining are banned, how the government promotes the digital yuan, and what the legal implications are for individuals and businesses in China.
China has one of the most restrictive environments for cryptocurrency in the world. While the government has banned crypto trading and mining, it has aggressively promoted its central bank digital currency (CBDC), the digital yuan. Enforcement has been strict since 2021.
Summary
Cryptocurrencies like Bitcoin and Ethereum are banned for trading and mining in China. The government has cracked down on exchanges and initial coin offerings (ICOs), and financial institutions are prohibited from offering crypto-related services. However, individuals are not explicitly banned from owning crypto assets, although usage is heavily discouraged.
Legal Status
- General Use: Discouraged and restricted
- Trading: Banned
- Exchanges: Banned domestically; offshore platforms are blocked
- Mining: Banned since 2021
- ICOs & Tokens: Banned
- NFTs: Not banned, but tightly monitored; referred to as “digital collectibles”
Taxation
Due to the ban on crypto activities, China has not developed a taxation framework for cryptocurrency trading or mining. However, there is emerging guidance on taxation of NFTs and digital collectibles.
- Capital Gains Tax: Not applicable under current crypto bans
- Income Tax on Crypto Earnings: Not applicable
- Mining Taxation: Not applicable (mining is illegal)
- Reporting Requirements: No recognized legal crypto holdings reporting
Regulatory Bodies
- People’s Bank of China (PBOC): Oversees monetary policy and banned financial institutions from crypto transactions
- Cyberspace Administration of China (CAC): Enforces restrictions on crypto-related content online
- National Development and Reform Commission (NDRC): Banned crypto mining as part of energy and carbon goals
Key Regulations & Laws
- 2013 PBOC Circular: Warned banks not to deal in Bitcoin
- 2017 ICO Ban: Prohibited all initial coin offerings and closed domestic exchanges
- 2021 Nationwide Ban: Comprehensive ban on all crypto trading, mining, and foreign exchange platforms
- Digital Yuan Development: Actively promoting the e-CNY (digital yuan), China’s state-backed digital currency
Timeline of Regulatory Milestones
| Year | Event | Description |
|---|---|---|
| 2013 | Bitcoin warning | PBOC issues early warning about risks of crypto |
| 2017 | ICO crackdown | Banned ICOs and shut down local crypto exchanges |
| 2019 | Mining discouraged | Mining labeled as “undesirable industry” |
| 2021 | Total ban | Declared all crypto transactions illegal |
| 2023 | e-CNY pilot expansion | CBDC trials expanded in dozens of cities |
Resources
- People’s Bank of China (PBOC)
- Cyberspace Administration of China (CAC)
- Digital Yuan Official Info (State Media)
Notes
- Travel Tip for Crypto Users: Using crypto apps or discussing trading publicly may be risky; VPNs are required to access most global crypto platforms.
- Local Adoption Trends: Despite the bans, underground trading and offshore usage persist. The public is heavily encouraged to adopt the digital yuan.
- Language Notes: Official documents are in Mandarin; English-language summaries are rare.