When you hear "China" and "crypto" together, the first image that pops up is a massive crackdown. But what does that actually mean for anyone wanting to buy, trade, or even hold a digital coin inside mainland China today? The short answer is: you can’t. As of June12025, the People’s Bank of China (PBOC) declared a full prohibition on all cryptocurrency activities - trading, mining, and even personal ownership. Below we break down the legal framework, the agencies that enforce it, what the penalties look like, and why the government still backs its own digital currency, the e‑CNY.

What the Law Says

Cryptocurrency regulation in China is a legal regime that classifies any transaction, mining operation, or personal holding of decentralized digital assets as illegal financial activity. The rule, issued by the People's Bank of China on May302025, makes it a criminal offence to engage in any crypto‑related conduct.

The decree mandates that every financial institution - banks, payment providers, and even fintech apps - must block crypto‑related payments and report suspicious activity to law‑enforcement bodies. Non‑compliance can trigger asset seizures, fines, and imprisonment.

Key Agencies and Their Roles

• Ministry of Public Security - leads anti‑money‑laundering (AML) investigations and prosecutes crypto‑related crimes.
• Cyberspace Administration of China - monitors online platforms, blocks crypto content, and forces internet service providers to filter prohibited sites.
• Ministry of Industry and Information Technology - oversees the shutdown of mining farms and coordinates hardware inspections.
• State Administration of Foreign Exchange - enforces capital‑control rules that prevent cross‑border crypto transfers.

These bodies operate under a coordinated working mechanism that blends digital surveillance with on‑the‑ground inspections, creating a 24/7 monitoring network for any crypto‑related signal.

Timeline of the Ban

1. December52013 - Banks barred from processing Bitcoin payments.
2. April12014 - PBOC orders closure of Bitcoin trading accounts.
3. September302017 - Nationwide ICO ban and shutdown of domestic exchanges.
4. January2018 - Massive miner exodus as authorities clamp down on mining farms.
5. June2021 - Explicit ban on crypto mining in several provinces.
6. September242021 - De‑facto ban on all digital tokens, including Bitcoin.
7. June12025 - Full criminalization of ownership, trading, and mining.

Each step tightened the net, moving from soft restrictions to a hard‑line criminal framework.

Penalties You Need to Know

The law treats crypto violations as money‑laundering offenses. Typical sanctions include:

• Up to threeyears imprisonment for first‑time offenders.
• Fines ranging from 50,000 to 200,000yuan (≈US$7,000‑$28,000).
• Asset seizure of any crypto holdings and related equipment.
• Criminal records that affect future employment and travel.

A landmark case in August2024 saw a Beijing court sentence a trader to 3.5years and a 40,000yuan fine for moving USDT tied to fraud. The ruling introduced a "should have known" standard, meaning ignorance isn’t a defense if the transaction’s illicit nature is apparent.

Why the Ban Coexists with the e‑CNY

China’s crackdown targets private, decentralized tokens, but the state still pushes its own digital fiat - the e‑CNY (digital yuan). The rationale is two‑fold:

• Financial stability: A sovereign digital currency can be monitored and controlled, eliminating the anonymity that fuels money‑laundering.
• Capital control: e‑CNY allows the People's Bank to track cross‑border flows, preserving the country’s foreign‑exchange regime.

In practice, the e‑CNY operates under a centralized ledger managed by the PBOC, offering many of the convenience benefits of crypto without the regulatory headache.

Comparison: Crypto Ban vs e‑CNY

How Businesses Can Stay Compliant

If your company operates in China, the compliance checklist is simple yet unforgiving:

1. Remove any crypto‑related services from your product roadmap.
2. Implement AML software that flags keywords like "BTC", "wallet", "exchange" in transaction descriptions.
3. Train staff to recognize and report suspicious crypto activity to the Ministry of Public Security.
4. Audit all offshore subsidiaries to ensure they aren’t facilitating crypto services to Chinese residents.
5. Adopt the e‑CNY API for any digital payment features you wish to keep.

Failure to follow these steps can lead to immediate shutdown orders and criminal investigations.

Is There Any Outlook for Softening?

In July2025, a Shanghai State‑Owned Assets Supervision meeting discussed "strategic responses to stablecoins and digital currencies." While no policy shift was announced, the fact that the topic made it onto the agenda hints at internal debate. Analysts suggest any future relaxation would likely focus on regulated stablecoins that can be easily monitored, not on permissionless tokens.

For now, the safest bet is to treat all private crypto as off‑limits within China’s borders.

Quick Takeaways

• All crypto activities are criminal offenses in mainland China as of June12025.
• The PBOC, Ministry of Public Security, Cyberspace Administration, and MIIT enforce the ban.
• Penalties include prison time, hefty fines, and asset seizures.
• China promotes its own digital yuan (e‑CNY) as a legal alternative.
• Compliance requires removing crypto services, AML monitoring, and reporting to authorities.