Crypto Payments in China: Current Legality and Practical Implications
Oct, 15 2025
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Key Takeaways
- As of June12025, all domestic cryptocurrency payments are illegal in mainland China.
- The ban covers trading, mining, holding, and any form of payment using private crypto tokens.
- Cross‑border blockchain settlements are permitted only inside state‑approved sandboxes.
- China’s official digital currency, the e‑CNY, is the only government‑backed crypto‑like payment method.
- Businesses must redesign payment flows to use e‑CNY or traditional fiat channels to stay compliant.
What the 2025 Ban Actually Says
On May302025 the People's Bank of China issued a sweeping decree that makes any crypto‑related payment activity a criminal offense. The decree went live on June12025 and explicitly targets:
- Buying, selling, or swapping any private cryptocurrency.
- Using crypto tokens to settle goods, services, salaries, or taxes.
- Operating or accessing crypto wallets, even if they contain a single coin.
- Providing infrastructure (exchanges, mining rigs, payment gateways) for the above.
Violations can lead to asset seizure, fines up to5millionCNY, and imprisonment of up to threeyears. The enforcement bodies include the Cyberspace Administration of China which monitors online activity and coordinates raids on illegal platforms and the Ministry of Industry and Information Technology.
How We Got Here: A Decade‑Long Tightening
The 2025 ban is the final piece of a regulatory puzzle that began in 2013 when banks were first told not to process Bitcoin transactions. Key milestones:
- 2017 - ICO ban: The State Council classified Initial Coin Offerings as illegal fundraising.
- 2021 - Mining shutdown: All domestic mining farms were ordered to cease operations; the country lost over 30% of global hash power.
- 2022 - Legal interpretations: Courts dismissed all civil claims involving crypto assets, setting precedent for future criminal cases.
- 2024 - Enforcement surge: Dozens of raids on underground exchanges resulted in arrests and the confiscation of millions of dollars worth of crypto.
Each step built on the previous one, culminating in the all‑encompassing prohibition signed by the PBOC.
What Remains Legal: Blockchain‑Based Cross‑Border Payments
China’s stance isn’t a blanket rejection of blockchain. The government runs a tightly controlled sandbox for international settlement. One flagship project is mBridge a multi‑CBDC pilot linking China, Hong Kong, Thailand, and the UAE for cross‑border payments. Participants can move value using a token that settles on the underlying central bank digital currencies, but the system never touches private crypto.
Regulators also allow stablecoins that are fully collateralised by the digital yuan, but only within approved financial institutions. Any attempt to use foreign‑issued stablecoins for domestic purchases still falls under the 2025 ban.
e‑CNY: The Government‑Backed Alternative
The e‑CNY is China's official digital yuan, issued and controlled by the People's Bank of China. Unlike Bitcoin or Ethereum, e‑CNY gives the state full visibility and the ability to enforce monetary policy in real time. Pilot programs cover major cities such as Shenzhen, Suzhou, and Chengdu, allowing citizens to pay for groceries, transport, and even government fees using a smartphone wallet.
Because e‑CNY is a sovereign digital currency, it is exempt from the crypto payment ban. Companies that want to accept crypto‑like payments domestically must integrate e‑CNY APIs or revert to traditional bank transfers.
Practical Implications for Businesses and Consumers
If you run an e‑commerce platform targeting Chinese customers, here’s what you need to change:
- Remove crypto checkout options: Any button that says “Pay with Bitcoin” or “Pay with USDT” must be disabled for users accessing the site from mainland IP addresses.
- Integrate e‑CNY: Obtain the PBOC’s API credentials, follow the sandbox testing guide, and launch the digital‑yuan payment flow.
- Update KYC/AML procedures: The CAC now requires reporting of any transaction involving more than 10,000CNY in crypto‑related activity, even if it occurs offshore.
- Educate staff: Front‑line employees should know that owning a personal crypto wallet is not illegal per se, but using it to move money in or out of China is.
For consumers, the main takeaway is simple: you can still hold crypto on overseas exchanges, but you cannot use it to pay for goods or services inside China. Attempting to do so may trigger account freezes or police investigations.
Comparison: Domestic Crypto Payments vs. e‑CNY vs. Cross‑Border Sandbox
| Method | Domestic Use | Cross‑Border Use | Regulatory Body |
|---|---|---|---|
| Private cryptocurrencies (BTC, ETH, USDT) | Prohibited | Only within approved sandbox (highly restricted) | PBOC, CAC |
| e‑CNY (digital yuan) | Allowed - government‑issued digital cash | Allowed - can settle cross‑border via mBridge | PBOC |
| Stablecoins backed by e‑CNY | Allowed only through licensed financial institutions | Permitted in sandbox environments | China Banking and Insurance Regulatory Commission |
Future Outlook: Will the Ban Ever Loosen?
Industry analysts keep an eye on two signals that could hint at policy shifts:
- Shanghai SASAC meetings: The Shanghai State‑owned Assets Supervision and Administration Commission has been discussing strategic responses to stablecoins and CBDCs since July2025. So far, no concrete proposal to reopen domestic crypto payments has emerged.
- International competitive pressure: Neighboring fintech hubs like Singapore and Hong Kong are rapidly expanding crypto‑friendly frameworks. China may broaden sandbox programs to retain global finance relevance, but any expansion will stay tightly under state control.
In short, a softening of the domestic ban looks unlikely in the next few years. The government is heavily invested in making e‑CNY the standard digital payment instrument, and the legal framework reinforces that priority.
Next Steps for Readers
Depending on your role, here’s a quick checklist:
- Entrepreneurs: Pivot crypto checkout flows to e‑CNY or fiat gateways for Chinese customers.
- Investors: Keep crypto holdings offshore; avoid any transaction that routes funds through mainland China.
- Legal counsel: Advise clients on the criminal penalties outlined in the PBOC decree and ensure KYC systems capture crypto‑related activity.
- Tech developers: Explore API integration with the e‑CNY sandbox if you plan to serve the Chinese market.
Staying compliant means treating crypto as an off‑limits payment method inside China while leveraging the government‑approved digital yuan for any legitimate digital transaction.
Frequently Asked Questions
Can I legally own Bitcoin while living in China?
Owning Bitcoin on an overseas exchange is not a criminal offense, but using it to pay for goods, services, or to move money in or out of China is prohibited and can trigger investigations.
Is the e‑CNY the same as a stablecoin?
No. The e‑CNY is a sovereign digital currency issued by the People's Bank of China, fully backed by the state. Stablecoins are privately issued tokens that may be pegged to the yuan but remain subject to separate regulation.
Can foreign companies settle payments with Chinese partners using crypto?
Only inside a government‑approved sandbox such as the mBridge pilot. Outside those environments, any crypto‑based settlement is illegal.
What are the penalties for violating the crypto ban?
Penalties range from asset seizure and fines up to 5millionCNY to criminal imprisonment of up to threeyears, depending on the severity and repeat‑offense status.
Will the ban affect crypto mining equipment already abroad?
No. The ban targets activities within mainland China. Mining farms that relocated overseas can continue operating, but any equipment or hash power that returns to China faces confiscation.
Millsaps Crista
October 15, 2025 AT 09:00If you're trying to navigate China's crypto crackdown, the fastest route is to drop every private‑token checkout and double‑down on the official e‑CNY. The People’s Bank of China has made it crystal clear that any domestic transaction using Bitcoin, Ethereum, or USDT is a criminal offense. You can’t just hide behind a VPN or a foreign exchange; the surveillance systems flag cross‑border wallet activity in real time. Replace your payment gateway with the e‑CNY API, and you’ll stay on the right side of the law while keeping the user experience smooth. Remember, fines can hit up to 5 million CNY and even three years behind bars for repeat offenders. So act now, re‑engineer your checkout flow, and avoid costly legal headaches.
Shane Lunan
October 15, 2025 AT 11:46Domestic crypto payments are a no‑go in China, period.
Jeff Moric
October 15, 2025 AT 14:33Everyone reading this should keep in mind that the ban isn’t just a suggestion, it’s enforced with heavy penalties. If you run an overseas e‑commerce site, geofencing your crypto payment buttons for mainland IPs is a must. It’s also a good idea to add a brief notice for Chinese visitors explaining that only e‑CNY or traditional fiat is accepted. This keeps your compliance team happy and your customers clear on what’s allowed.
Bruce Safford
October 15, 2025 AT 17:20Look, the whole crypto thing in China is a massive surveillance trap that the government built brick by brick. First, they slapped the 2013 bank ban, then the 2017 ICO crackdown, and kept piling on until the 2025 decree finally said “no more.” They monitor wallet addresses, exchange logs, and even Telegram chats with AI‑driven pattern matching. If you think moving a few coins offshore will keep you safe, think again – the tax authorities have a line of sight into offshore exchanges through the “Great Firewall” analytics. The mBridge sandbox they brag about? It’s a tightly‑controlled lab where only approved state‑run entities can test cross‑border settlements. Anything outside that is considered smuggling, and they treat it like contraband. Asset seizure, massive fines, and up to three years behind bars are just the baseline penalties – repeat offenders get harsher sentences. You’ll also see raids on “underground” exchanges with heavy‑handed police units, often with the CAC and Cyberspace Administration coordinating. The ban also covers holding crypto on an overseas exchange if you try to funnel money back into China. Even casual miners who keep a few GPUs at home are now on the watchlist. The government’s narrative is that crypto threatens monetary sovereignty, but the underlying motive is control over capital flows. So, yeah, the whole ecosystem is being squeezed into the digital yuan, and anyone who resists is painted as a criminal. Bottom line: if you value your freedom, stop trying to use private crypto in China and adopt the e‑CNY or risk disappearing in a legal black hole.
Jordan Collins
October 15, 2025 AT 20:06From a compliance standpoint, the 2025 decree creates a clear binary: e‑CNY is permitted, private cryptocurrencies are not. Companies should therefore audit their payment stacks immediately, disabling any BTC/ETH/USDT options for mainland users. The penalty framework-asset seizure, fines up to 5 million CNY, and imprisonment-leaves little room for ambiguity. Additionally, cross‑border transactions must be confined to state‑approved sandboxes such as mBridge; otherwise they fall under the same illegal classification. In practice, this means redesigning checkout flows, integrating PBOC APIs, and updating KYC/AML processes to capture any crypto‑related activity above the 10,000 CNY threshold.