China has not banned the possession of cryptocurrencies by individuals. However, it has banned all crypto-related commercial activities.
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✅ What is banned in China?
Since September 2021, the People’s Bank of China declared all crypto transactions illegal. This includes:
Trading cryptocurrencies
Fundraising via cryptocurrencies (e.g., ICOs)
Payments using crypto
Operating crypto exchanges
Crypto mining (also banned due to environmental and energy concerns)
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✅ What is still legal?
Despite the strict rules on trading and mining, owning crypto as a private citizen is still legal in China. In fact, Chinese courts have recognized crypto as virtual property, meaning individuals have legal rights if their assets are stolen or involved in disputes.
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❓ Why did China ban crypto transactions?
The government cited several reasons:
1. Financial stability: Cryptos are seen as speculative and risky, threatening economic order.
2. Illegal activities: Crypto is linked to fraud, money laundering, and scams.
3. Capital control: Cryptos allow people to bypass China’s strict capital flow regulations.
4. Support for the digital yuan: By banning decentralized cryptos, China promotes its official digital currency (e-CNY), which gives the state more control over transactions.
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➕ Bonus Note
Interestingly, while mainland China bans crypto services, Hong Kong has taken a pro-crypto stance, positioning itself as a global crypto hub, possibly to attract international capital while keeping mainland policies strict.