- China’s crypto “ban” is not absolute; Binance processed $90 billion in transactions.
- The legal framework permits individual crypto possession and peer-to-peer trading.
- Restrictions exist but don’t entirely outlaw cryptocurrency, allowing some operational leeway.
Despite numerous reports in Western media portraying China’s cryptocurrency restrictions as an outright “ban,” the reality on the ground in mainland China tells a different story. Remarkably, in a single month last year, Binance conducted $90 billion worth of transactions in Chinese cryptocurrency, positioning China as the top market for the globe’s leading exchange.
What explains this phenomenon? While it might be appealing to frame this as a narrative about cryptocurrency’s ability to bypass governmental oversight, and there’s certainly merit to that viewpoint, it doesn’t capture the full picture. Cryptocurrency trading has not vanished in China, not because it is entirely prohibited, but because the ban is not as absolute as often depicted.
This perspective contrasts sharply with the narrative presented by many Western media sources, which frequently discuss China’s cryptocurrency restrictions in terms of outright bans on trading. To understand the extent of these reports, a simple search of related terms will reveal the prevalence of this narrative. However, when querying various experts within the Chinese crypto industry about the accuracy of describing the situation as a crypto ban, the consensus was clearly against such a characterization. They explained that while it’s not illegal for individuals to possess or engage in cryptocurrency transactions, such activities lack legal protection.
This view extends beyond just casual discussions. An article penned by authors affiliated with a court in Fujian province observed that “administrative laws and policies do not fully outlaw virtual currency transactions.” Additionally, a reputable law firm in China has issued a comprehensive commentary stating, “at present, there are no laws or administrative regulations in our country that forbid the trading of Bitcoin.”
The perception of a total ban on cryptocurrency in China is misleading. Although Chinese authorities have imposed stringent restrictions on crypto-related activities, they have not entirely outlawed the ownership or peer-to-peer trading of digital currencies. Notable regulatory milestones include the 2013 restrictions on financial institutions from engaging with Bitcoin, the 2017 ban on ICOs, and a significant clampdown in 2021 that targeted virtual currency exchanges and domestic crypto mining.
Despite these actions, the 2021 regulations did not explicitly prohibit individuals from holding or trading cryptocurrencies among themselves. This legal landscape suggests that while the Chinese government has restricted certain aspects of the crypto industry to curb financial risks, it leaves a narrow path for personal crypto activities.
This nuanced approach indicates that, although crypto operations face significant limitations, there is still some leeway for individual engagement with cryptocurrencies, albeit without legal protection against potential losses. This complex regulatory environment underlines the importance of understanding the specifics of China’s stance on crypto, which is more about navigating legal grey areas than dealing with an outright ban.
