Why is virtual currency not allowed in China?

Given the strength of domestic prohibitions, virtual currency is hardly considered banned.

True prohibition means enacting strict laws like those against drugs, establishing dedicated enforcement agencies, creating a strong and lasting propaganda campaign, setting arrest KPIs, and regularly conducting sweep operations; that is what is called prohibition.

Gambling and pornography are only semi-banned; punitive measures mainly target the vital points of those within the system. Rather than being a legal regulation, it is more of a political requirement.

As for virtual currency, it is practically not banned at all. If you mess around with Bitcoin at home, would you worry about the police breaking in? If you voluntarily confess at the police station saying, 'I bought Bitcoin,' the police would probably look perplexed and not know what to do with you.

The true attitude towards virtual currency is actually 'refusal to endorse.' You can tinker with it; whether you lose or gain, don't go rolling around at the government's door, blaming the government for 'not taking care of me.'