June 03, 2025
By Anjali Kochhar
In a bold yet controversial move that is already sending ripples through the global crypto ecosystem, China has reportedly imposed a fresh ban on the holding of cryptocurrencies such as Bitcoin, citing the need to safeguard and promote the adoption of its central bank digital currency (CBDC), the digital yuan. The renewed restrictions mark a significant intensification of the country’s already hardline stance against decentralised digital assets, with implications not only for domestic investors but also for the global balance of crypto innovation, policy, and capital flows.
According to media reports, the new ban prohibits individual and institutional ownership of cryptocurrencies, tightening a regulatory grip that was previously focused on mining and trading activities. This development is being interpreted as an effort to eliminate competition to the digital yuan and ensure state-controlled dominance over digital financial infrastructure.
The announcement follows a 2024 Chainalysis report which estimated that crypto trading volumes in China via over-the-counter (OTC) desks exceeded $20 billion, despite previous bans. This suggests a thriving underground market and significant public interest in digital assets making the fresh prohibition not just a policy maneuver, but also a cultural reset.
At the heart of the move is Beijing’s growing emphasis on financial centralisation. By cracking down on decentralised financial instruments, the government aims to remove any perceived threats to its monetary sovereignty posed by borderless digital currencies like Bitcoin and Ethereum. But in attempting to control the digital financial narrative at home, China may be unintentionally creating opportunities for other nations to assert leadership in the global crypto race.
Industry Leaders React: From Shock to Strategic Optimism
The crypto industry has been swift in responding to China’s renewed clampdown, with many leaders seeing both cautionary tales and strategic windows of opportunity.
Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, framed the development in a geopolitical context:
“As per some media reports, China has imposed a fresh ban on holding digital assets like Bitcoin in order to protect and promote use of digital yuan. A 2024 Chainalysis report revealed that the total crypto trading volume in China via OTC desks exceeded $20 billion, which shows wide-range adoption of digital assets in region. On a positive note, U.S. policymakers may see China’s ban as an opportunity to lead in the digital currency space, with discussions around establishing a strategic Bitcoin reserve and fostering a pro-crypto regulatory environment.”
Anish Jain, Founder & Group CEO of W Chain, emphasised the broader implications for blockchain technology:
“China’s renewed ban on holding cryptocurrencies, including Bitcoin, reflects a cautious approach towards emerging digital assets amid regulatory and financial stability concerns. However, this also highlights the growing global momentum and resilience of blockchain technology. At W Chain, we believe that while regulations evolve, the innovation and adoption of decentralised finance will continue to shape the future of money and digital ownership. It’s crucial for stakeholders to engage constructively with regulators to foster a balanced ecosystem that protects users while enabling technological progress.”
Vikram Subburaj, CEO of Giottus Crypto Platform, offered a pointed analysis on the potential for India to benefit:
“China’s latest prohibition on individual crypto holdings is a significant escalation in its ongoing efforts to centralise financial control and promote the digital yuan. This move also chimes with China’s broader geopolitical stance against decentralised digital assets. The Chinese ban may inadvertently benefit India’s crypto industry by attracting talent, capital, and innovation. There could be a heightened inflow to a more open and regulated environment that is India. A small regulatory move by the Union government could have manifold benefits at this juncture as large institutions with crypto in its balance sheets and the huge retail market would prefer a more futuristic and open ecosystem to operate. Once the actual picture of the capital and talent drain from China emerges, it should also serve as a cautionary tale that highlights the risks of over-centralisation and the suppression of financial autonomy. For Indian investors, this development underscores the importance of regulatory clarity and the need for a balanced approach to digital asset management. India’s crypto ecosystem, characterised by a cautious yet progressive regulatory environment, stands in stark contrast to China’s restrictive measures. India has implemented taxation policies and is in the process of formulating comprehensive regulations. It has always refrained from outright bans.
Effectively, China’s ban reinforces the need for India to continue its measured approach to crypto regulation. It is also not too late to take proactive steps to usher in investors, large institutions, and capital by announcing perks, single-window clearances, and a conducive business environment, all within the ambit of regulatory clarity.”
Global Realignments and the Road Ahead
China’s ban represents more than just a domestic policy shift it’s a strategic signal. By placing its full weight behind the digital yuan and pushing decentralised assets out of its financial system, China is clearly aiming to create a tightly controlled digital economy, free from the volatility and borderless nature of crypto assets.
Yet, in doing so, it may be opening doors for competitors. Countries like the U.S., which are exploring the idea of a national Bitcoin reserve, and India, with its cautious but crypto-inclusive stance, are now better positioned to attract the exodus of talent and capital.
For global investors and innovators, the message is clear: the era of crypto suppression may still have state-led flare-ups, but the underlying momentum of decentralised finance is far from extinguished. And as the world watches China tighten its hold, it may also witness other nations stepping into the space it leaves behind with freer markets, smarter regulations, and more inclusive digital futures.
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.
