Bitcoin in China: The Business Ban, Property Status and What Holders Can Still Do

No primary source in mainland China makes it illegal for an individual to hold Bitcoin. What is prohibited is Bitcoin business activity: exchange services, trading as a central counterparty, pricing services, related financial products and offshore platforms serving mainland users, under the People’s Bank of China’s Notice No. 42 of February 6, 2026. Hong Kong and Macao are separate legal systems, and Hong Kong licenses Bitcoin trading platforms.

Bitcoin itself is not outlawed in mainland China, but almost every business built around it is.

The core document is the Notice on Further Preventing and Handling Risks Related to Virtual Currency and Other Matters, document number Yinfa [2026] No. 42, issued on February 6, 2026 by eight agencies led by the People’s Bank of China (PBOC). It is published in full by the China Securities Regulatory Commission. It is a joint departmental notice (通知, tōngzhī), issued after agreement with the Supreme People’s Court and the Supreme People’s Procuratorate and “with the consent of the State Council”. It is not a statute passed by the National People’s Congress.

Paragraph (1) defines the position. In my translation: “Virtual currencies such as Bitcoin, Ether and Tether have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledgers or similar technology, and existing in digital form; they do not have legal tender status (法偿性, fǎchángxìng) and should not and cannot circulate and be used as currency in the market.”

The same paragraph classifies “virtual currency-related business activities” as illegal financial activities (非法金融活动, fēifǎ jīnróng huódòng), meaning financial business carried on without legal authorization.

No primary source I reviewed makes owning Bitcoin illegal for an individual. The law instead removes legal protection from Bitcoin investments.

Paragraph (19) of Notice No. 42 reads, in my translation: “Where any entity or individual invests in virtual currency, real-world asset tokens or related financial products in violation of public order and good morals (公序良俗, gōngxù liángsú), the relevant civil juristic acts are invalid and the resulting losses shall be borne by that person; where this is suspected of undermining financial order or endangering financial security, the relevant departments shall investigate and deal with it according to law.”

This tracks Article 153 of the Civil Code, whose second paragraph states that a civil juristic act violating public order and good morals is invalid.

When the PBOC announced its first Bitcoin notice on December 5, 2013, it described Bitcoin trading as buying and selling goods on the internet, and said ordinary people have the freedom to take part at their own risk.

In practice: holding sats is not a listed offense, but a court may refuse to enforce a Bitcoin deal, and losses stay with the holder.

Chinese regulators classify Bitcoin as a virtual commodity, not money, and the Civil Code leaves room for its protection as online virtual property.

The PBOC’s 2013 announcement describes Bitcoin as “a specific virtual commodity” (特定的虚拟商品, tèdìng de xūnǐ shāngpǐn) without legal status equal to currency.

Article 127 of the Civil Code, adopted on May 28, 2020, provides in my translation: “Where the law has provisions on the protection of data and online virtual property (网络虚拟财产, wǎngluò xūnǐ cáichǎn), those provisions apply.” Article 113 adds that the property rights of civil subjects receive equal legal protection.

Article 127 points to other laws but does not itself name Bitcoin. I could not confirm a published decision of the Supreme People’s Court on Bitcoin’s property status, so lower-court rulings reported in the press are not used here.

Each document targets businesses, financial institutions and platforms. None of them names individual holding as an offense.

Notice Yinfa [2013] No. 289 of December 3, 2013, issued by the PBOC and four other agencies, barred financial institutions and payment institutions from Bitcoin business. According to the PBOC’s announcement, they may not price products in Bitcoin, buy or sell it, act as a central counterparty, insure it, or provide registration, trading, clearing, settlement, exchange, storage, custody or pledge services. Websites offering Bitcoin trading had to file with telecom authorities and meet anti-money laundering duties. It did not restrict individuals. Notice No. 42 does not repeal it.

The announcement of September 4, 2017, issued by seven agencies, called token issuance financing (代币发行融资, dàibì fāxíng róngzī) unapproved illegal public fundraising and ordered it to stop. Token trading platforms could no longer exchange fiat for “virtual currency”, trade as a central counterparty or provide pricing services. The announcement told investors they bear their own risk.

Notice Yinfa [2021] No. 237 of September 15, 2021, issued by ten agencies including the two supreme judicial bodies, declared all virtual currency business illegal and covered offshore exchanges serving mainland residents. It is published on gov.cn. It was repealed on February 6, 2026.

Notice No. 42 is the current text. It binds these groups:

The notice does not mention wallets, self-custody or transfers between individuals.

Offshore exchanges may not serve mainland users, and people who help them face liability.

Paragraph (1) of Notice No. 42 states that foreign entities and individuals “shall not illegally provide virtual currency-related services to domestic entities in any form”. Paragraph (18) adds that domestic entities and individuals who know, or should know, of such services and still assist them are liable, and criminally liable where a crime is made out.

Hong Kong’s regulator reflects the same line. In its statement of May 28, 2024, the Securities and Futures Commission reminded platforms to prevent Mainland Chinese residents from accessing their virtual asset services.

Judicial interpretations (司法解释, sīfǎ jiěshì), the rulings that tell courts how to apply the Criminal Law, name virtual currency in two offenses.

Fa Shi [2022] No. 5, in force since March 1, 2022, lists raising funds “through online lending, equity investment, virtual currency trading and other means” as illegal absorption of public deposits (非法吸收公众存款, fēifǎ xīshōu gōngzhòng cúnkuǎn).

Fa Shi [2024] No. 10, issued by both supreme bodies on August 19, 2024, covers money laundering. Article 5(6) treats “transferring or converting criminal proceeds and their gains through ‘virtual asset’ transactions or financial asset exchanges” as a laundering method. Under Article 4, laundering of 5 million yuan or more with an aggravating factor is “serious”. Article 12 limits the predicate offenses to seven listed categories, including drug crimes and financial fraud.

Yes. National policy orders existing mining shut down and new projects banned.

The National Development and Reform Commission (NDRC) and other agencies published Notice Fagai Yunxing [2021] No. 1283 on September 24, 2021. It listed virtual currency mining (挖矿, wākuàng) in the “eliminated” (淘汰类, táotài lèi) category of the industrial restructuring catalogue, meaning activity to be phased out, and prohibited investment in it (paragraph (7)). It also stopped new grid connections (paragraph (10)), imposed a surcharge of 0.30 yuan per kilowatt-hour (paragraph (13)) and cut off financial services to miners (paragraph (16)).

Paragraph (9) of Notice No. 42 confirms that policy under the Industrial Structure Adjustment Guidance Catalogue (2024 Edition). Provincial governments must close existing mining projects, ban new ones, and stop mining machine makers from selling in the mainland. The texts speak of projects and enterprises and contain no exception for small-scale mining.

They apply through banks and payment firms, which may not serve Bitcoin business and must report suspicious activity.

The Anti-Money Laundering Law was revised on November 8, 2024 and took effect on January 1, 2025, under Presidential Order No. 38 published by the National People’s Congress. Article 10 states that no entity or individual may engage in money laundering (洗钱, xǐqián) or facilitate it, and that all must cooperate with customer due diligence.

The PBOC’s 2013 announcement already required Bitcoin websites to identify users and report suspicious transactions. Paragraph (6) of Notice No. 42 now requires financial institutions to monitor risk and report leads.

In practice: a bank transfer linked to a Bitcoin purchase can be refused or reported.

The State Administration of Foreign Exchange (SAFE) treats virtual currency activity as a cross-border risk that banks must report.

Article 3 of SAFE’s Measures for Banks’ Reporting of Foreign Exchange Risk Transactions (Trial), published in December 2024, requires banks to report foreign exchange risk transactions (外汇风险交易, wàihuì fēngxiǎn jiāoyì). The definition includes “illegal cross-border financial activities involving virtual currency”. SAFE also co-issued Notice No. 42, which cites the Foreign Exchange Administration Regulations as a legal basis.

I found no State Taxation Administration document that addresses tax on Bitcoin gains. The point is listed under “Unverified points”.

Yes. Hong Kong is a separate legal system that licenses Bitcoin trading platforms.

Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), anyone operating a virtual asset exchange in Hong Kong needs a licence from the Securities and Futures Commission (SFC). The SFC’s statement of May 28, 2024 confirms the regime started on June 1, 2023, that operating in breach is a criminal offence, and urges investors to trade only on licensed platforms.

The Stablecoins Ordinance (Cap. 656) was gazetted on May 30, 2025 and came into operation on August 1, 2025. It introduces a licensing regime for stablecoin activities. The government said the Hong Kong Monetary Authority (HKMA) consulted on the detailed requirements.

Pending: on December 24, 2025, the Financial Services and the Treasury Bureau and the SFC concluded consultations on licensing virtual asset dealers and custodians, with a bill to be introduced into the Legislative Council in 2026. These regimes are not in force.

Macao’s monetary authority treats Bitcoin as an unregulated commodity and keeps banks away from it.

On June 17, 2014, the Monetary Authority of Macao (AMCM) stated that Bitcoin is a virtual commodity, “neither a legal tender nor a financial instrument subject to supervision”. On September 27, 2017, it said its notice of September 20, 2017 reminded banks and payment institutions not to provide any financial services for related activities.

The difference confirmed in a primary source is the issuer. Notice No. 42 defines virtual currency by issuance from “non-monetary authorities”. I could not open the PBOC’s own text on the current e-CNY framework, so further detail is left out.

No mainland primary source I reviewed prohibits individual self-custody. The restrictions surround it instead.

Notice No. 42 does not mention private wallets or keys. Banks cannot serve Bitcoin business, platforms cannot advertise it, and offshore services are barred. Paragraph (19) means a dispute over a Bitcoin deal may go unenforced.

Under Article 1122 of the Civil Code, an estate consists of a person’s “lawful personal property”. Whether Bitcoin qualifies has not been settled in a primary source I could open, and heirs without the keys cannot move the coins regardless.

No mainland primary source makes holding Bitcoin illegal for an individual. PBOC Notice No. 42 of February 6, 2026 prohibits Bitcoin business activity inside the mainland, including exchange services, central counterparty trading, pricing services and offshore platforms serving mainland users. Hong Kong and Macao are separate systems, and Hong Kong licenses trading platforms.

No primary source I reviewed lists owning Bitcoin as an offense. Paragraph (19) of Notice No. 42 instead provides that investments in virtual currency violating public order and good morals are void civil acts, with losses borne by the investor. Courts may therefore refuse to enforce a Bitcoin deal.

Notice No. 42 states that foreign entities and individuals shall not illegally provide virtual currency services to domestic entities in any form. Under paragraph (18), domestic entities and individuals who knowingly assist such providers are liable, and criminally liable where a crime is made out. Hong Kong’s SFC also tells platforms to exclude Mainland Chinese residents.

Yes. NDRC Notice No. 1283, published September 24, 2021, listed virtual currency mining as an eliminated industry and prohibited investment in it. Paragraph (9) of Notice No. 42 of 2026 orders provincial governments to close existing mining projects, ban new ones and stop mining machine makers from selling in the mainland.

Yes. Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), Bitcoin trading platforms in Hong Kong need an SFC licence, a regime in place since June 1, 2023. Operating without one is a criminal offence. Licensing regimes for dealers and custodians remain pending before a bill reaches the Legislative Council.

I found no State Taxation Administration document on chinatax.gov.cn that addresses tax on Bitcoin gains, so this article states no rate or rule. A 2008 reply on online game currency exists but was not opened and is not applied to Bitcoin. The point stays under Unverified points until a primary source addresses it.

No mainland primary source I reviewed prohibits self-custody, and Notice No. 42 does not mention private wallets or keys. The restrictions fall around it: banks may not serve Bitcoin business, platforms may not advertise it, offshore services are barred, and Bitcoin investment contracts may be void.

This article is general information and not legal advice.

To see how China compares with other countries, open The Bitcoin Act’s interactive Global Bitcoin Regulatory Map. It tracks legal status, self-custody, tax and seizure risk across more than 140 jurisdictions: https://thebitcoinact.xyz/bitcoin-legal-map

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