Cryptocurrencies in China: bans as a strategy, not a campaign

Cryptoassets in China live in a paradox mode: interest in them persists, but the legal framework leaves minimal space for legal circulation. The authorities have been pursuing one line for years - private tokens should not compete with national money and cannot become a bypass route for capital flow management. Therefore, restrictions on cryptocurrency transactions look like an element of the financial model rather than a reaction to the market cycle.

At the end of 2025, stablecoins are at the center of the discussion. For supervisors, it is "digital cash" that easily crosses borders and works as a surrogate for the dollar online. The exchange rate is usually held by reserves in highly liquid securities, often U.S. Treasuries, and this is what makes the topic politically sensitive: a private unit of account relies on an external financial circuit. In this logic, the risks are down-to-earth - pressure for currency restrictions and increased complexity of settlement management.

A separate concern is the use of stablecoin in gray settlements. Industry reviews mention the role of USDT in informal schemes, when market participants try to bypass barriers to conversion and transfers. This is a reality for companies: technical availability of the instrument does not equal acceptability, and verification of the origin of funds and counterparties becomes mandatory.

A telling story comes from Hong Kong. In mid-2025, it approved a licensing regime for fiat stablecoin, including RMB-linked variants, hoping to attract large issuers and strengthen its status as a financial center. However, analysts say the launch has been put on hold after consultations with mainland regulators. The reason is pragmatic: tokens issued in Hong Kong can circulate far beyond the territory's borders, and therefore take currency risk and oversight beyond the boundaries of the local regime.

At the same time, Beijing is not abandoning distributed ledger technologies - it is moving them into managed channels. e-CNY is built so that issuance, circulation rules and access to data remain under administrative oversight, while international initiatives like mBridge use a similar logic: modern infrastructure without private issuance.

CFOs should treat the situation as a scenario planning task: describe acceptable settlement instruments, set up checks on the origin of funds, prescribe triggers to stop transactions, and prepare communications for banks and auditors.