Despite strict bans on cryptocurrency trading and mining, China continues to intensify its oversight of the sector, fearing regulatory evasion and cross-border capital flows. Authorities acknowledge that digital assets still impact domestic financial stability.
SAFE Calls for Deeper Analysis of Crypto Impact
Li Bin, a senior official from the State Administration of Foreign Exchange (SAFE), stated during the Boao Forum for Asia that the agency is ramping up its efforts to track and analyze the influence of cryptocurrencies on capital movement.
We need a deep understanding of digital assets and their impact on cross-border transactions— Li Bin
He emphasized that improving monitoring methods is essential, as the nature of digital assets is evolving rapidly.
Reasons Behind China’s Restrictions
China imposed a ban on cryptocurrency trading and mining due to:
- Capital flow control – aimed at limiting the outflow of funds from the country.
- Financial risks – to prevent speculation and instability.
- Environmental concerns – due to the high energy consumption of mining activities.
Investors Circumvent the Bans
Despite the restrictions, many Chinese investors use offshore crypto exchanges, VPN networks, and DeFi platforms to continue trading cryptocurrencies. This raises concerns that illegal crypto activity may undermine regulators’ efforts.
Additionally, major miners have relocated their operations to foreign jurisdictions such as the U.S., Kazakhstan, and Canada, transferring both capital and infrastructure.
Conclusion:
Although China remains one of the strictest markets for cryptocurrencies, the government recognizes the need for enhanced monitoring to mitigate potential risks to financial stability.
While some investors find ways to bypass the system, Chinese regulators have made it clear that combating uncontrolled crypto flows will remain a priority.
Frequently Asked Questions
Find answers to the most common questions below.
Due to concerns over capital control, financial stability, and the environmental impact of crypto mining.
Although trading is banned, some investors use offshore exchanges and DeFi platforms via VPNs.
SAFE and other institutions are strengthening oversight and developing more effective mechanisms to track cross-border crypto transactions.
Not for now — the government maintains a firm stance but acknowledges the need for technological understanding and monitoring of the sector.
This article is for general informational purposes only and is not intended to be, and should not be construed as, legal or investment advice.
