Cryptocurrency Restrictions in China: What's Banned and Why It Matters

When it comes to cryptocurrency restrictions in China, a total government prohibition on digital asset activity that leaves no legal room for trading, mining, or ownership. Also known as China’s crypto ban, it’s not a regulation—it’s an elimination. Unlike countries that tax or limit crypto, China erased it from its financial system entirely. There are no crypto taxes because crypto transactions are illegal. No one can legally buy Bitcoin, mine Ethereum, or hold a wallet. If you do, you’re on your own.

This isn’t just about control—it’s about replacing crypto with something else: the digital yuan, China’s state-backed central bank digital currency (CBDC) designed to track every transaction and eliminate private financial autonomy. Also known as e-CNY, it’s the government’s answer to decentralized money. While Bitcoin thrives on anonymity, the digital yuan thrives on surveillance. That’s why mining operations shut down overnight in Sichuan and Xinjiang. Exchanges like Binance and Huobi were forced out. Even foreign users who tried to access Chinese-based services got blocked. The goal wasn’t to regulate—it was to replace.

The ripple effects are global. Miners moved to Kazakhstan, the U.S., and Canada. Traders turned to P2P markets and offshore platforms. But inside China, the silence is total. No public listings. No legal recourse. No tax filings because there’s nothing to file. Even holding crypto as an asset isn’t protected under property law. If your wallet gets hacked, you can’t report it. If you’re scammed, there’s no authority to call. And if you’re caught trading, you risk fines, account freezes, or worse.

What’s left in the post-ban landscape? A few underground P2P traders using WeChat and QQ. A handful of foreigners with offshore wallets who still use crypto for remittances. And a growing number of Chinese developers building tools for overseas markets—because the domestic market is dead. Meanwhile, the crypto mining China, once the world’s largest hub for Bitcoin mining, now has zero legal infrastructure. Also known as crypto mining ban, it wiped out 65% of global hash power in 2021. The hardware sits idle. The power grids no longer need the load. The economy moved on.

So why does this matter if you’re not in China? Because it shows what happens when a government decides crypto is too dangerous to coexist with its financial system. It’s the most extreme example of state control over digital money. And it’s a warning to other countries considering heavy-handed bans. There’s no middle ground here—no licensing, no compliance, no exceptions. If you’re looking for how crypto survives under total suppression, you won’t find it in China. But you’ll find plenty of lessons in what happens after the ban.

Below, you’ll find real stories, breakdowns, and updates on how China’s crypto ban shaped the global market—from the collapse of mining hubs to the rise of the digital yuan. No fluff. No theory. Just what actually happened, and what it means for anyone still using crypto today.