This is a complex issue involving law, finance, technology, and sovereignty boundaries. Although relevant rules have yet to be introduced, several key pieces of information have surfaced in the reports, drawing significant attention from the industry.

Local governments have previously resold cryptocurrency assets through private companies.

According to reports, some local governments, when faced with confiscated cryptocurrency assets, have chosen to sell these digital assets in overseas markets through private technology companies, thus realizing asset liquidation to supplement local financial income.

Taking Shenzhen as an example, a technology company named *** has represented the government in handling cryptocurrency valued at over 3 billion yuan since 2018, and the liquidation funds have been returned to China for unified management by the financial system. Although this behavior has not yet been classified as illegal, the transparency and legality of this 'gray operational model' are increasingly being questioned.

The huge amount involved raises anxiety about institutional gaps.

According to data previously released by China Court Online, the total amount of criminal cases involving virtual currency in 2023 reached 430.7 billion yuan, while the local government's confiscated income for that year totaled 378 billion yuan. The scale of asset handling urgently requires a more unified and compliant system for regulation.

Currently, different provinces and cities have inconsistent practices in confiscating and handling cryptocurrency assets; some use auction bidding while others entrust third-party companies, leading to insufficient market transparency and increased corruption risk.

Experts call for the inclusion of cryptocurrency assets in the sovereign reserve system.

More attention should be paid to the suggestions from some legal and financial professionals that China should refer to the U.S. government's practices regarding Bitcoin reserves, incorporating some cryptocurrency assets into national strategic resources, and even suggesting the establishment of a management mechanism similar to a 'cryptocurrency sovereign fund' in Hong Kong to enhance control over these assets and global bargaining chips.

Currently, there are no signs that the central government will adopt this proposal, but relevant suggestions have appeared in policy discussions and think tank articles, which may be a signal worth monitoring in the medium to long term.

Regulatory stance remains unchanged, but the policy window may have opened.

As of now, the basic regulatory stance of mainland China on cryptocurrencies remains at the level of 'comprehensive prohibition of trading and mining.' However, if the standardized management of confiscated assets becomes a policy focus, it may indicate that the regulatory framework is gradually being restructured.

From the judicial perspective of the default legality of individual cryptocurrency holdings, to the financial system's acceptance of liquidated funds, to the current public discussion of local government asset disposal models, the regulatory space for cryptocurrencies as 'unconventional assets' may be slowly opening a 'non-public path.'

Conclusion: Institutional signals behind the fog.

Although China has not explicitly lifted the ban on cryptocurrencies, the public discussion about 'how to handle the cryptocurrency assets held by the government' has already sent a key signal to the outside world — the issue of digital asset governance is gradually moving towards institutionalization and realism.

At this juncture, the sharp capture of policy rhythm and public opinion direction may determine the future participation and risk exposure in the cryptocurrency market.