China bans cryptocurrency: Fact vs fiction

News about a complete ban on cryptocurrency in China is circulating on social media and crypto websites. The reports are merely based on rumours and are completely false. Chinese authorities have not responded to the alleged new restrictions.

A cryptocurrency policy was established by China in 2021 that remains in effect. This crypto policy prohibits:

• Financial institutions to engage in any sort of crypto engagement.

• Crypto trading

• Mining of cryptocurrency

Despite this ban from legal authorities, individuals are still allowed to own cryptocurrencies.

The rumours stated that the new restriction began in 2025, but there is no official response from the Chinese government. Credible sources confirmed that there is no new policy or law regarding a complete crypto ban.

The circulating rumours affected the crypto market for some time. The market became volatile and prices dipped for cryptocurrencies like Ethereum and Bitcoin. The situation stabilised after the claims were debunked.

Some reports allegedly claimed that the new policy will extend the ban, but there is no authenticity to these claims. China announces any major policy reform through the official state media.

The Chinese government is planning to launch a yuan-backed stablecoin, a step towards government-based digital currencies.

It is important to note that Hong Kong has a different approach. The special administrative region has its regulated cryptocurrency framework and is positioned as a digital finance hub.

Details about the new coin are not clear yet. However, authorities in Beijing are committed to controlling the financial system through central bank digital currency (CBDC). Therefore, the yuan digital (e-CNY) will be different from other decentralised cryptocurrencies.

Is crypto legal in China?

China banned cryptocurrency in September 2021 and declared crypto-related financial and business activities illegal.