China Crypto Assets: 2025 Crypto Assets Landscape Guide

Introduction

Since China first ventured into the cryptocurrency space over a decade ago, the landscape of cryptocurrency in China has undergone significant changes. From Bitcoin's early dominance in mining to the severe crackdown by regulators in 2021, which ultimately led to a near-complete ban on cryptocurrency trading and mining, mainland China's stance on cryptocurrency has encompassed the entire spectrum: from embracing the industry to full eradication.

In 2021, the People's Republic of China (PRC) banned cryptocurrency trading and mining on the mainland. At the same time, as a Special Administrative Region with an independent legal system, Hong Kong established a regulated framework for digital assets through the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC). Some analysts believe that Hong Kong's development may provide a reference for future policies in mainland China.

As of 2025, the government continues to prohibit cryptocurrency trading and mining according to the laws of mainland China. However, subtle changes in regulatory posture and developments in Hong Kong indicate that the central government's stance may have softened.

Summary

• China once dominated global Bitcoin mining and centralized exchanges, but regulatory bans quickly weakened its leading position in the industry.
• Most mining operations and centralized exchanges in China have moved overseas, and many still dominate globally today.
• After the United States strengthened the support for the US dollar with the “GENIUS Act”, China emphasized the development of the digital yuan to reduce its dependence on the US dollar.
• Analysts describe Hong Kong as a regulatory sandbox within China's “one country, two systems” framework, with Hong Kong's stablecoin regulations in 2025 becoming a bridge between the strict controls of mainland China and global cryptocurrency innovation.

Background of Cryptocurrency in China

China was an early adopter of cryptocurrency, particularly in the field of Bitcoin mining. The year 2013 was a turning point for mining in China, as Bitcoin began to receive national media attention. This led to the establishment of several companies in the field, including miners themselves and ASIC mining hardware manufacturers. Notably, the largest ASIC mining hardware manufacturer, Bitmain, was founded during this period. Many mining operators in the country also moved to regions with cheaper electricity to further optimize operations. The rapid popularity of Bitcoin mining in the early days in China led to the country dominating the share of Bitcoin's computing power, which peaked at 60-75% during the period of 2017-2020.

From 2019 to 2021, China's dominance in the Bitcoin mining sector gradually declined - Kraken

In the past six or seven years, the cryptocurrency boom in China has also led to the establishment of several exchanges, including Huobi, OKX (formerly OKCoin), and Binance, which have ultimately developed into industry giants. In fact, Binance still maintains its leading position among centralized exchanges, accounting for approximately 35% of spot trading volume and 50% of derivatives trading volume.

Huobi, OKX, and Binance were all established in mainland China between 2013 and 2017, but after the regulatory crackdown in 2017, they relocated overseas and continued to operate as global exchanges. With the arrival of 2021, the regulatory environment gradually tightened, initially targeting Bitcoin mining operations, which later expanded to buying, selling, services, and trading. Despite the implementation of strict bans, China's global influence remains, as miners and exchanges have shifted their operations to neighboring Kazakhstan and Russia.

Cryptocurrency Held by the Chinese Government

Despite the ban imposed by the Chinese government, it may still hold cryptocurrencies. Like many other governments, these assets are largely considered to stem from criminal seizures related to cryptocurrencies, especially the PlusToken Ponzi scheme.

PlusToken is a Ponzi scheme that uses a non-existent arbitrage trading platform as a selling point with enticing daily returns. The scam surfaced in April 2018 and lured over 2.6 million users within a year, primarily from China and South Korea. As of now, the PlusToken team is estimated to hold assets worth $2.2 billion, mainly in Bitcoin. Other tokens held by PlusToken include ETH, XRP, LTC, and EOS.

Assets confiscated in the PlusToken scam - The Block

After the collapse of the scam and the arrest of its manipulators, Chinese authorities seized these assets. According to the court's ruling, these assets will be “handled according to the law, and the proceeds will be turned over to the national treasury.” However, the officials have not made a clear confirmation on whether the Chinese government still holds these assets or if they have been sold.

On-chain analysts, such as CryptoQuant's CEO Ki Young Ju, believe that Bitcoin may have been sold, transferred through mixers, and sent to multiple exchanges for liquidation, including Huobi. Moreover, the flow of over $445 million in ETH from PlusToken associated addresses in 2024 also indicates some form of redistribution or liquidation is taking place.

2024 PlusToken Associated Address ETH Transfer - Arkham

China Cryptocurrency Ban

The first blow to China's cryptocurrency industry occurred in December 2013, when the People's Bank of China issued a notice prohibiting financial institutions from handling Bitcoin, classifying it as a commodity rather than a currency.

During the initial coin offering (ICO) boom in 2017, the People's Bank of China and six other government departments issued a ban on ICOs and token financing activities, requiring all domestic centralized exchanges to cease operations.

In 2021, regulatory efforts further escalated. Based on the initial regulatory framework, in May 2021, financial institutions and payment companies were prohibited from providing services related to cryptocurrencies. In June 2021, major mining centers such as Inner Mongolia, Xinjiang, and Sichuan implemented measures to crack down on Bitcoin mining activities, citing the impact of power consumption on the environment. This crackdown led to a mass migration of large Bitcoin mining companies from China to neighboring countries like Kazakhstan and Russia, which currently account for a significant share of global computing power.

Mainland China bans cryptocurrency trading and mining - Reuters

The heaviest blow occurred in September 2021, when China's most authoritative regulatory agencies, including the People's Bank of China, issued a joint statement officially banning all cryptocurrency transactions, including trading between cryptocurrencies and fiat currencies, regardless of the platform used. This ban effectively declared all cryptocurrency transactions illegal, marking the strictest prohibition to date.

Although there are restrictions on transactions and services involving cryptocurrencies, personal possession of cryptocurrencies is not explicitly illegal.

Stablecoin

In 2025, the United States established a comprehensive regulatory framework for stablecoins through the Stablecoin Act (GENIUS Act), which was signed into law by President Trump in July. This legislation represents a historic step toward clarity and oversight in the regulation of stablecoin issuance and use, particularly regarding its issuance and collateral requirements. The Stablecoin Act restricts the issuance of stablecoins to insured deposit institutions and approved financial institutions, ensuring that all issued stablecoins are backed by high-quality liquid assets (such as cash, U.S. Treasury securities, and other low-risk securities) at a 1:1 ratio. The Act also mandates strict transparency, anti-money laundering (AML), and consumer protection requirements. By establishing predictable standards and enhancing trust, this legislation promotes broader adoption of stablecoins, further consolidating the dollar's dominant position in global digital payment and settlement systems, and strengthening the dollar's status as the preferred global reserve currency.

The renminbi accounts for 2.88% of global payment share - Trade Treasury Payments

In response to the strengthening dominance of the US dollar, China has increased its investment in the stablecoin sector to promote the internationalization of the renminbi. Currently, the renminbi accounts for approximately 2.9% of the total global payments. China’s main focus remains on promoting its central bank digital currency (CBDC) — the digital renminbi (e-CNY), aimed at enhancing monetary sovereignty and reducing dependence on the US dollar-based international financial system.

This move differs from its strict stance on cryptocurrencies since 2021 and may signal a softening of China's hardline anti-cryptocurrency position. Although mainland China still maintains a broad ban on cryptocurrency-related activities, Hong Kong has been conducting controlled innovations under its own regulatory bodies (the Hong Kong Monetary Authority and the Securities and Futures Commission). Some commentators believe that Hong Kong's evolving regulatory framework could serve as a testing ground for policymakers in the central government. In August 2025, the Hong Kong Monetary Authority implemented the “Stablecoin Ordinance” in Hong Kong, establishing a licensing regime for stablecoin issuers.

Hong Kong

With the latest developments in the stablecoin sector, Hong Kong has become a leading center for cryptocurrency innovation in Greater China, underpinned by a comprehensive regulatory framework for stablecoins and increasing institutional interest.

In August 2025, the Hong Kong Monetary Authority launched a licensing system for stablecoin issuers under the Stablecoin Ordinance, establishing strict requirements for capital adequacy, reserve asset segregation, and anti-money laundering controls. At the same time, it allows licensed banks and fintech companies to issue tokens backed by USD and assets for both retail and wholesale purposes. This regulatory clarity has attracted prominent advocates, including Eric Trump, who has interacted with Hong Kong legislators and industry forums to support cryptocurrency startups, indicating their confidence in Hong Kong's legal certainty and its role as a bridge between East and West.

Observers believe that the central government's attitude towards Hong Kong's flourishing crypto ecosystem is strategic rather than lenient, effectively treating the Special Administrative Region (SAR) as a controlled testing ground for digital asset integration. By allowing Hong Kong to take the lead in launching a stablecoin framework and piloting cross-border settlement projects, the central government can monitor risks and benefits before considering broader adoption in the mainland. Some analysts refer to this as a “sandbox model,” which enables Chinese authorities to observe operational resilience, compliance challenges, and market dynamics, and may provide references for future policies regarding the interoperability of decentralized cryptocurrencies and the digital yuan, while maintaining its strict cryptocurrency ban in the mainland.

Conclusion

At first glance, the relationship between mainland China and cryptocurrencies in 202 seems somewhat contradictory: firmly prohibiting the use of decentralized cryptocurrencies domestically, yet willing to cautiously observe and learn from the controlled digital asset experiments taking place in Hong Kong.

Although the central government is still committed to making the digital RMB the main vehicle for its financial innovation and monetary influence, the establishment of a regulated stablecoin ecosystem in Hong Kong indicates that it has recognized the increasingly important role of cryptocurrencies in global finance. This dual-track model allows mainland China to maintain strict domestic regulation while still being able to monitor (and in some respects benefit from) international developments, especially in the context of the United States consolidating its dominance through comprehensive stablecoin regulation.

For investors, entrepreneurs, and policymakers, the message is clear: although mainland China remains closed to opening up the cryptocurrency market, Hong Kong is emerging as a strategically significant hub that could shape the future of digital assets in the region. Whether this ultimately leads to the central government further softening its stance will depend on the balance it strikes between national control, economic opportunities, and global competition.