Beijing continues to tighten its grip on the cryptocurrency sector, reaffirming a strict ban on digital asset activities and expanding the crackdown to include stablecoins and tokenized real-world assets. Despite some speculation about a potential shift in policy, the likelihood of China legalizing onshore Bitcoin purchases by the end of remains remarkably low, estimated at just 5% by traders on Polymarket, a prediction market platform.
The latest regulatory framework, established in , builds upon the 2021 ban and explicitly targets entities involved in supporting cryptocurrency activities, including marketing, facilitation of transactions, and payment settlement. This represents a significant escalation of China’s previously stated position, codifying what regulators are calling “Ban 2.0.”
The focus on stablecoins is particularly noteworthy. Regulators are concerned about their potential use for money laundering, fraud, and unauthorized cross-border fund transfers. The new rules specifically prohibit the unauthorized offshore issuance of renminbi-pegged stablecoins, effectively closing a potential loophole that could have allowed Chinese citizens to access cryptocurrencies indirectly.
While Hong Kong is exploring more permissive regulatory approaches, such as Bitcoin ETFs and stablecoin licensing, mainland China is doubling down on its restrictive stance. This divergence in policy highlights a regional strategy, with Hong Kong positioned as a potential gateway for digital assets while the mainland maintains strict control.
The Polymarket assessment, according to NS3.AI, reflects the prevailing sentiment among traders regarding the prospects for a policy reversal. The market is pricing in a very low probability that the Chinese government will explicitly permit citizens to convert renminbi into Bitcoin within mainland China by the end of . This distinction is crucial, as the regulatory architecture recently completed by Beijing points firmly against such a move.
The current ban extends beyond simply prohibiting trading. It encompasses onshore trading, banking facilitation related to cryptocurrencies, and the issuance of stablecoins. The new regulations also address the burgeoning field of tokenized real-world assets, subjecting them to strict controls with limited exceptions. This suggests a broader effort to prevent the integration of blockchain technology with traditional financial systems in a way that could circumvent existing regulations.
The notice issued by Chinese financial agencies and watchdogs reiterates that any involvement in crypto-related activities, including trading, issuing, or facilitating transactions involving digital currencies like Bitcoin and Ether, is illegal. This prohibition extends to foreign entities and individuals offering such services within China, further tightening the restrictions.
The timing of this renewed crackdown coincides with increased speculative activity related to virtual currencies and the tokenization of real-world assets. Regulators cite concerns about risk prevention and control as the primary driver behind the stricter measures. The notice explicitly states that recent developments have “posed new challenges and situations for risk prevention and control.”
The implications of this continued ban are significant. It effectively cuts off a vast potential market for cryptocurrency businesses and limits the ability of Chinese citizens to participate in the global digital asset ecosystem. While some individuals may still find ways to access cryptocurrencies through offshore channels, these methods are likely to be more costly and carry greater risks.
The focus on civil deterrence, as highlighted in the regulatory documents, suggests a willingness to pursue legal action against individuals and entities involved in cryptocurrency-related activities. This could include fines, asset seizures, and even criminal charges. The government’s intent is to create a strong disincentive for participation in the digital asset market.
The contrast between China’s approach and that of other jurisdictions, such as the United States and Europe, is stark. While these regions are grappling with how to regulate cryptocurrencies, they generally favor a more nuanced approach that seeks to balance innovation with investor protection. China, however, remains firmly committed to maintaining control over its financial system and preventing the widespread adoption of digital assets.
The Polymarket data suggests that the market is not anticipating a significant change in China’s policy anytime soon. The 5% probability assigned to onshore Bitcoin legalization reflects a deep skepticism about the government’s willingness to reverse course. While unforeseen circumstances could always alter the situation, the current regulatory environment strongly suggests that China will continue to enforce its ban on cryptocurrencies for the foreseeable future.
The recent price crash of Bitcoin, falling to just over $60,000 from a peak of $126,000 in October 2025, adds another layer of complexity to the situation. While not directly attributable to China’s policies, the ongoing regulatory uncertainty contributes to the overall market volatility and investor apprehension.
