China banned cryptocurrency due to several reasons, primarily to:

- *Prevent Financial Crime*: The People's Bank of China cited the role of cryptocurrencies in facilitating financial crime, such as money laundering and fraud.

- *Maintain Economic Stability*: The government views cryptocurrencies as highly speculative and a risk to China's financial system.

- *Combat Capital Flight*: China aims to prevent capital outflow and stabilize its foreign exchange, as cryptocurrencies can bypass conventional restrictions.

- *Promote Digital Yuan*: The ban coincides with the rollout of China's digital yuan, which could be threatened by decentralized cryptocurrencies.

- *Ensure National Security*: The government sees cryptocurrencies as a potential threat to social stability and national security.

These reasons led to a comprehensive ban on cryptocurrency transactions, mining, and related services in September 2021.