April 2, 2025
By Anjali Kochhar
Despite China’s strict crackdown on cryptocurrencies, many Chinese investors continue to find ways to trade Bitcoin and other digital assets. This growing trend highlights the increasing demand for alternative investments, especially as the Chinese economy faces uncertainty.
China’s Crypto Ban and Its Impact
In 2021, China imposed a nationwide ban on cryptocurrency trading and mining. The government declared all cryptocurrency transactions illegal and instructed financial institutions to prevent crypto-related activities. The crackdown led to a significant drop in China’s share of global Bitcoin transactions, which fell from over 90% to just 10%, according to the People’s Bank of China.
Despite these efforts, Chinese investors remain highly active in the crypto market. Reports suggest that between July 2022 and June 2023, cryptocurrency transactions in China amounted to around $86.4 billion. This was even higher than Hong Kong’s crypto transaction volume of $64 billion during the same period. Notably, transactions ranging from $10,000 to $1 million made up nearly double the global average, indicating strong participation from large investors.
How Investors Bypass the Ban
Chinese investors have adopted various methods to bypass the country’s strict restrictions. One common strategy is using smaller rural banks, which are less closely monitored, to conduct crypto-related transactions. By keeping transactions under 50,000 yuan ($6,978), investors can avoid triggering regulatory alarms.
Another popular approach is using fintech platforms such as Alipay and WeChat Pay to convert yuan into stablecoins. Stablecoins, like USDT (Tether), are then used to purchase cryptocurrencies on international exchanges such as Binance and OKX. Since these platforms are officially restricted in China, many traders use Virtual Private Networks (VPNs) to access foreign crypto services. Additionally, some investors set up overseas bank accounts to conduct transactions, further bypassing local restrictions.
Why Bitcoin is Gaining Popularity in China
The growing interest in Bitcoin among Chinese investors is partly due to the country’s struggling economy. The Chinese stock market has been in a prolonged downturn, and the property sector once a major driver of wealth has also been facing significant challenges. Many investors now see Bitcoin as a “safe haven” asset that can offer better returns compared to traditional investments.
For example, a Shanghai-based finance executive revealed that he had shifted half of his investment portfolio into cryptocurrencies. His crypto holdings had increased by 45%, while his traditional investments had suffered losses. Such stories reflect a broader trend of Chinese investors moving away from conventional assets and into digital currencies.
Hong Kong as a Crypto Gateway
Hong Kong’s relatively relaxed stance on cryptocurrency has made it an attractive option for Chinese investors. Many mainland Chinese are using their annual foreign exchange purchase quotas to move money into Hong Kong-based crypto accounts. These funds are supposed to be used for overseas travel or education, but investors are instead diverting them into cryptocurrency trading.
As a result, Chinese financial institutions are also exploring crypto-related business opportunities in Hong Kong, where regulations are more favourable. This trend is helping to maintain China’s presence in the global cryptocurrency market, despite the government’s continued restrictions.
The Future of Crypto in China
China’s ongoing crypto activity highlights the difficulty of enforcing a complete ban on decentralised digital assets. Despite strict regulations, the global nature of cryptocurrencies and the adaptability of investors make it nearly impossible to eliminate crypto trading entirely.
As China’s economy continues to struggle, more investors may turn to Bitcoin and other digital assets as alternative investments. The battle between regulation and innovation is far from over, and the future of cryptocurrency in China remains uncertain. However, one thing is clear despite all efforts to curb its use, Bitcoin continues to thrive among Chinese investors.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
