- China pushed out crypto mining while promoting its state-controlled digital yuan for tighter monetary control.
- Hong Kong acts as a crypto-friendly testing ground, possibly influencing future mainland policies.
- China’s future with crypto could range from maintaining the ban to slow legalization under strict state oversight.
So, here’s the thing—China says it’s cracking down on crypto to protect financial stability, stop capital from flying out the window, and save the environment. Fair enough. But in the process, it basically booted out most major crypto mining operations. Where’d they go? The U.S., Kazakhstan, Canada… all over.
But while the government was busy clamping down, retail investors weren’t exactly out of the game. A lot of them just pivoted—using offshore exchanges or diving into DeFi protocols that, well, aren’t so easy to regulate. So yeah, the trading didn’t stop. It just moved.
Meanwhile… Enter the Digital Yuan
China’s been rolling out its digital yuan (e-CNY) in the background. You’ve probably heard of it—it’s the country’s Central Bank Digital Currency (CBDC), and the goal is clear: replace cash, boost efficiency, and give the state tighter control over how money flows. Real-time visibility, total oversight. You get the idea.
So while crypto gets banned, e-CNY gets a full greenlight. It’s a pretty stark contrast.
Hong Kong Playing a Different Game
Now here’s where it gets interesting—Hong Kong, unlike mainland China, has gone in the opposite direction. In 2023, they introduced a licensing system for crypto exchanges that actually lets them serve retail users (imagine that). They’ve even been exploring blockchain stuff through the Hong Kong Monetary Authority, and playing around with CBDC initiatives that cross borders.
Some folks think Hong Kong is being used as a kind of test lab for China’s long-term crypto plans. If the region can attract capital, encourage innovation and still maintain regulatory control, maybe that gives China a reason to rethink its hard stance. Or maybe not. Depends on how things play out.
That said, it’s also possible that Hong Kong’s policies stay isolated—like a bubble of regulation that doesn’t really impact China’s broader system at all.
Where Could This All Be Going? A Few Scenarios
Right now, the future’s murky. But here are a few possible directions China might take:
1. Same Old, Same Old (Status Quo)
- The crypto ban stays in place.
- Retail and institutional investors keep sneaking in through offshore routes or decentralized apps.
- Hong Kong keeps building out its crypto ecosystem, but nothing spills over to the mainland.
2. Institutional, But Super Controlled
- China allows some institutional players to dabble in crypto—but under tight restrictions.
- Major banks and tech giants might get limited access.
- Retail users? Still locked out. No mass adoption.
3. Slow Legalization, Heavy Oversight
- China could launch a highly-regulated system for crypto investing.
- Exchanges might be state-approved and tightly watched, like in Hong Kong.
- The digital yuan would stay center stage, with DeFi and decentralized coins kept on a short leash.

Blockchain Projects? Still a Go.
Despite the crypto chill, China hasn’t ditched blockchain tech altogether. Actually, they’re still investing in it—just in the controlled, enterprise-friendly kind of way:
- Blockchain Service Network (BSN): Government-backed infrastructure for companies to build private chains.
- Cross-Border Trade Settlements: Using blockchain to streamline international deals with strategic partners.
So yeah, crypto = no. But blockchain = yes… as long as it fits the playbook.