Legal Crypto Business in China: What's Allowed and What's Not

When it comes to crypto business in China, a highly restricted environment where private cryptocurrency trading and mining are banned, but blockchain innovation is actively encouraged. Also known as blockchain-only policy, China’s approach separates digital assets from the underlying technology—making it one of the most unique regulatory models in the world. You can’t buy Bitcoin on a Chinese exchange. You can’t mine Ethereum in a warehouse in Shenzhen. But you can build a blockchain-based supply chain tracker, register a smart contract platform, or work for a state-backed digital currency project. The line isn’t just blurry—it’s razor-thin, and crossing it can mean fines, shutdowns, or worse.

The central bank digital currency, the digital yuan (e-CNY), is China’s only legal crypto-like asset. Also known as Digital Currency Electronic Payment (DCEP), it’s controlled entirely by the People’s Bank of China. Unlike Bitcoin or Ethereum, it’s not decentralized. It’s not anonymous. It’s not for speculation. It’s a tool for financial oversight, payment efficiency, and state control. Businesses that want to operate legally in China must align with this system. Even foreign companies setting up offices in Shanghai or Beijing must avoid any crypto-related services that aren’t tied to the digital yuan or approved blockchain infrastructure. Meanwhile, blockchain technology, is not banned—it’s funded. Also known as enterprise blockchain, it’s being used in logistics, land registry, food safety tracking, and even public voting pilots. Companies like Alibaba and Tencent have entire teams building private blockchain networks for government clients. The difference? No tokens. No trading. No public access. Just clean, permissioned ledgers under state supervision.

What about crypto exchanges? They’re gone. Platforms like OKX and Bybit were blocked in 2021. Even offering crypto-related services to Chinese residents from overseas can trigger legal action. The same goes for mining. In 2021, China shut down over 90% of global Bitcoin mining operations overnight. Mining rigs were seized. Power was cut. And the country shifted its focus to green energy projects—ironically, the same reason Sweden now restricts mining. But here’s the twist: China still leads in blockchain patent filings. It’s not about crypto. It’s about control. It’s about infrastructure. And it’s about being first in the next phase of digital finance—on its own terms.

If you’re running a business that touches crypto in China, you need to know the difference between what’s permitted and what’s illegal. You can build a blockchain solution for a hospital. You can’t let employees buy Dogecoin. You can work with the digital yuan. You can’t run a DeFi wallet app. The rules aren’t written in public documents—they’re enforced through silence, sudden crackdowns, and vague laws. What you’ll find in the posts below are real cases: exchanges that vanished, tokens that got banned, and startups that pivoted to survive. No fluff. No guesses. Just what’s actually happening on the ground in China’s crypto gray zone.