China Declares a Full-Scale Crackdown on Cryptocurrencies

What China’s crypto notice bans

The People’s Bank of China (PBoC) and the China Securities Regulatory Commission said the updated document revises China’s 2021 playbook and expands the compliance perimeter to cover newer speculation around virtual currencies and “real-world asset” (RWA) tokenization, according to an official Q&A posted Feb. 6.

The notice keeps China’s prohibition-first stance and adds tighter guardrails around offshore issuance and tokenization structures that try to wrap off-chain claims in on-chain tokens, a segment often pitched as “RWA.” The text frames most crypto-facing business activity as illegal financial activity and pairs the policy with enforcement expectations for regulators, police, and local governments.

The core posture is straightforward:

• No legal recognition of crypto as “money”: regulators reiterate that virtual currencies do not share the legal status of fiat currency in China.
• Most crypto-related business activity is treated as illegal financial activity, with penalties and potential criminal referrals depending on conduct.
• Offshore platforms and foreign service providers are barred from offering crypto services into the mainland, tightening the cross-border perimeter.

The revised rules also put stablecoins and tokenization in the same enforcement lane. The notice states that no entity or individual may issue a stablecoin pegged to the renminbi abroad without approval, and it defines RWA tokenization broadly as converting ownership or income rights into token-like claims using cryptography and distributed ledgers, then issuing and trading them under structures that can resemble securities or fundraising activity.

It also gets more granular on what counts as prohibited crypto business, listing activities such as exchanging fiat and virtual currencies, operating as a central counterparty, and providing trading intermediation or pricing services, while adding that domestic entities and their controlled offshore entities may not issue virtual currencies abroad without approval. The same notice includes enforcement measures that explicitly reference ongoing cleanups of virtual-currency “mining” and related promotion and registration activity.

Market snapshot: Bitcoin near $69,500 as China reiterates ban

Bitcoin was down about 0.9% over the past 24 hours at roughly $69,543 as of 20:42 UTC, while ether was up about 1.3% near $2,098. Bitcoin traded in a roughly $67,700–$71,600 range over the past day. Total crypto market cap was about $2.46 trillion, and bitcoin dominance was roughly 56.6%.

China’s hard ban vs. Trump’s U.S. crypto agenda

In the notice, regulators wrote that bitcoin, ether, and tether “do not have legal tender status” and “should not and cannot be used as currency in market circulation,” while outlining a long list of prohibited business activities tied to trading, issuance, and intermediation, according to the PBoC’s published text.

The Feb. 6 package also makes enforcement posture explicit. It directs agencies to investigate and dispose of suspected illegal financial activity and states that cases suspected of constituting crimes should be transferred to judicial authorities, while also warning that investors bear losses for civil acts deemed invalid when they violate public order and good morals, per the same notice.

The policy timing widens a global split. China is choosing a hard perimeter that treats crypto rails as a monetary-sovereignty and financial-stability risk, including constraints on offshore issuance and on RMB-pegged stablecoins. In the U.S., by contrast, the fight is over what legal plumbing crypto is allowed to use and who gets to control it, a debate we track in our guide to US Crypto Regulation 2026.

That U.S. tug-of-war is not only regulators versus exchanges. Coinbase CEO Brian Armstrong said in a Fox Business interview that large banks’ lobbying arms are working to slow pro-crypto policy and protect incumbent payment and deposit economics, underscoring how institutional incentives can shape what “adoption” looks like in practice, according to Fox Business.

For markets, the implication is less about ideology and more about where liquidity and product development concentrate. A prohibition model can push activity offshore and into proxies, while a rulemaking model can channel flows into regulated wrappers that are ultimately mediated by institutions, an outcome early bitcoin advocates warned could turn an anti-bank technology into a bank-routed market.

What remains unclear is how aggressively China will pursue cross-border enforcement against offshore front ends and service providers that still touch mainland users, and how much RWA tokenization activity will migrate into approved financial infrastructure versus being shut down entirely. The next markers to watch are case announcements, new compliance guidance for intermediaries and IT providers, and whether U.S. policymakers convert pro-crypto messaging into durable statutes as China steps further away from the sector.