China Advocates for Collaborative Tracking of Cryptocurrency Transactions
In its 2024 Financial Stability Report, the People's Bank of China (PBOC) reiterated the importance of regulating the cryptocurrency market, following a global trend where 51 jurisdictions have imposed bans or restrictions on cryptocurrency use.
As of mid-2025, China has implemented a comprehensive ban on all cryptocurrency activities, including trading, mining, and individual ownership. This ban, enforced by the PBOC, includes suspension of crypto transactions and asset seizure measures. Major banks, including state-owned institutions, have been prohibited from engaging in or facilitating crypto transactions since at least 2013.
However, China is actively promoting its own digital currency ecosystem through the Digital Yuan (e-CNY), a centrally issued and controlled digital currency. In line with this, China is reportedly considering allowing yuan-backed stablecoins, which would mark a significant policy reversal and suggest a more flexible approach toward digital assets pegged to the Chinese currency.
Institutions like HSBC and Standard Chartered, operating in China, must comply with the country's strict crypto ban domestically. These banks primarily focus on the regulated digital yuan initiatives and the stablecoin regulatory framework developing in Hong Kong, a special administrative region with its own financial regulatory system.
China's approach remains among the strictest worldwide, contrasting sharply with countries like the United States, European Union, and Hong Kong. The U.S., for example, has established clear regulatory frameworks supporting stablecoins while maintaining oversight on consumer protections and financial stability. The EU and Hong Kong are also working toward comprehensive stablecoin regulations, with Hong Kong positioning itself as a hub for digital asset regulation, more permissive than mainland China’s current policy.
China's potential legalization of yuan-backed stablecoins signals a gradual softening toward regulated digital assets but still protects against decentralized cryptocurrencies. International coordination on cross-border monitoring of crypto assets is identified as a key priority by the regulator. Additionally, Hong Kong is actively exploring crypto licensing, and major financial institutions like HSBC and Standard Chartered Bank are required to incorporate Bitcoin transactions into standard customer oversight in Hong Kong.
In summary, China enforces a total ban on decentralized cryptocurrencies within its borders, strictly limiting activities for banks like HSBC and Standard Chartered. Yet, it is simultaneously developing a state-controlled digital currency (digital yuan) and exploring regulated yuan-backed stablecoins to bolster its currency’s global role. This contrasts with more crypto-permissive but regulated frameworks in Western countries and Hong Kong.
- The People's Bank of China (PBOC), despite enforcing a comprehensive ban on decentralized cryptocurrencies such as Bitcoin within China, is considering allowing yuan-backed stablecoins, indicating a gradual shift towards regulated digital assets.
- Chinese banks, like HSBC and Standard Chartered, operating within China must adhere to the strict crypto ban domestically but primarily focus on the regulated digital yuan initiatives and the stablecoin regulatory framework developing in Hong Kong.
