China Advocates for Shared Oversight of Cryptocurrency Transactions
In the global arena of cryptocurrency regulation, two significant players – China and Hong Kong – are taking distinct paths.
As of mid-2025, the official status of cryptocurrency regulation in mainland China is marked by a comprehensive ban on all crypto activities, including trading, mining, and individual ownership. This ban, effective from June 1, 2025, represents a significant escalation beyond prior measures that banned trading and mining but did not explicitly criminalize private holdings. The Chinese government pursues these restrictions primarily to eliminate competition against its state-backed digital currency, the digital yuan, ensuring full control and traceability of financial transactions.
However, there is some discrepancy in reporting: while strong claims about the ownership ban and criminalization have circulated widely, some sources indicate no official legislation confirming the ban on private ownership has been formally published, and rumors may be exaggerated or unsubstantiated. Despite these debates, the enforcement of earlier bans on trading and mining, combined with the strategic push for the digital yuan, underscores China’s strict anti-cryptocurrency stance.
In stark contrast, Hong Kong maintains a more liberal and regulated approach to cryptocurrency. The city is actively working to become a licensed hub for virtual assets, with a clear framework for exchanges and stablecoins. This regulatory difference allows Hong Kong to serve as a key gateway for crypto-related activities for investors linked to China and globally. Beijing’s strategy leverages Hong Kong as a central node for managing confiscated crypto assets and advancing its broader financial ambitions.
Major financial institutions like HSBC and Standard Chartered Bank, with significant operations in Hong Kong and mainland China, tend to follow local regulatory requirements closely. Globally, such institutions are generally cautious, aligning with increasing regulatory scrutiny in different jurisdictions, rather than aggressively promoting crypto holdings directly. They often provide regulated crypto-related financial services only where local laws permit, such as in financial centers with formal crypto regulations (e.g., Hong Kong) but remain restricted or withdrawn from crypto activities in markets like mainland China.
Elsewhere, some economies are amending existing laws or introducing new ones to regulate the cryptocurrency sector. The People's Bank of China will continue enhancing its regulatory framework for the cryptocurrency market, as emphasized in its 2024 Financial Stability Report. In Hong Kong, the regulatory body is actively exploring crypto licensing to further solidify its position as a regional hub for cryptocurrency activities.
Interestingly, the pro-crypto stance of Donald Trump's administration could potentially influence China's stance on digital asset market restrictions, according to Xiao Feng, CEO of HashKey Group.
In conclusion, while China adopts a stringent approach to cryptocurrencies to support its digital yuan, Hong Kong is carving out a space as a regulated and licensed hub for virtual assets, presenting a stark contrast in the two economies' approaches to the digital currency landscape.
- Despite the Chinese government's ban on Bitcoin activities, major financial institutions like HSBC and Standard Chartered Bank, with significant operations in both Hong Kong and mainland China, only provide regulated crypto-related services in regions like Hong Kong where local laws permit.
- While China's regulatory approach is marked by a comprehensive ban on Bitcoin, Hong Kong is actively working towards becoming a licensed hub for Bitcoin and other virtual assets, attracting crypto-related activities for investors linked to China and globally.
