China maintains the broadest crypto prohibition of any major economy. The September 2021 notice issued by the People's Bank of China with nine other agencies declared all crypto-related business activity, including exchange, order matching, token issuance, and derivatives, to be illegal financial activity, and extended the ban to overseas exchanges serving mainland residents. A parallel NDRC action banned mining, which had hosted a majority of global hash rate. Enforcement runs through payment blocking, criminal prosecution for illegal fundraising and illegal business operations, and periodic sweeps of over-the-counter desks.
Two nuances complicate the headline. Chinese civil courts have repeatedly recognized that crypto held by individuals has property attributes, so personal holding is not itself criminal, and disputes over stolen or misappropriated coins are justiciable. And the state runs the world's largest central bank digital currency program, the e-CNY, alongside continued interest in blockchain infrastructure. Periodic reports that mainland institutions might issue offshore yuan stablecoins through Hong Kong have not changed the domestic prohibition.
The instruments
Notice on Further Preventing and Dealing with Risks of Virtual Currency Trading and Speculation
Declares virtual-currency business activity illegal financial activity, bars financial institutions and payment companies from servicing it, extends jurisdiction to offshore exchanges serving mainland users, and directs criminal referral of violators.
Mining prohibition and industrial policy exclusion
Bans new virtual-currency mining projects, orders existing ones wound down, and classifies mining as an eliminated industry, with electricity-pricing penalties for holdouts.