On the eve of 2025, the Chinese government issued new laws significantly hindering the circulation of cryptocurrencies in mainland China. This was by far not the first attack on crypto by China. Is China a model for other governments that don’t want crypto in their countries?
New legal attacks on crypto in China
On December 31, 2024, China once again tightened its crypto regulations. This time, the foreign exchange regulator is pushing banks to report all cross-border crypto-related transactions and block affected parties’ access to certain banking services. Now, banks must track financial behaviors deemed risky based on the identity of transaction participants, source of funds, frequency of transactions and other factors.
Formally, regulation aims to obtain control over risky financial activities. The National Foreign Exchange Administration associates any transaction involving cryptocurrencies with risky financial behavior. Other transactions that fall into the restricted category include cross-border gaming transactions and transactions conducted through underground banks.
The fact that banks collect and report information about the people and institutions involved in these transactions adds a new dimension of risk to cryptocurrency trading and gambling. Now the parties involved risk facing unwanted attention from the state, denials of service, and possible long-term run-ins with the law.
The new regulations could seriously harm China’s cryptocurrency sector, which already exists under extremely difficult conditions, and many key companies and entrepreneurs have already fled the country to set up their businesses elsewhere. Notable examples are Binance, the world’s leading crypto exchange, and Tron founder Justin Sun.
Most likely, China’s new crypto laws will only becoming more hostile towards digital assets in the future (not counting CBDCs), while the latest regulations are fully in line with previous restrictions by Chinese authorities. China’s anti-crypto laws have managed to impact not only mainland China but also shake up the global crypto industry.
Previous Anti-Crypto Laws and Their Global Impact
The Chinese government has long suppressed the local cryptocurrency sector. It may seem that internal restrictions cannot impact the global crypto industry, but that is far from the truth. Some of the cryptocurrency laws passed in China have impacted the global cryptocurrency market.
At one point, China was the crypto capital of the world. The first crypto exchange, BTC China, was launched in 2011. In 2013, one of China’s largest online services, Baidu, began accepting Bitcoin payments. The following year, the revolutionary BTC mining company Bitmain was established in China. Growing totalitarian trends were pushing people to embrace cryptocurrency because it promised privacy and independence. It is understood that the government could not have tolerated this technology for long, as it undermined state domination and control.
China’s overall crypto regulatory journey can be seen as phasing out any tools that enable unsupervised private financial activity while requiring institutions and individuals to use the digital yuan (e-CNY), an entirely controlled by the government.
2017 was the year China started scrutinizing crypto platforms. In the first half of the year, several stock exchanges were threatened with closure due to non-compliance with anti-money laundering laws. In September, China banned initial coin offerings, amid the peak of the ICO bubble, causing the price of BTC to fall by around 5%. Even though only a tiny percentage of projects funded through ICOs have proven to have any real value, a total ban is not necessarily considered the best solution. These two attacks on the crypto sector led to a substantial drop in BTC prices in crypto markets across the world.
This does not prevent China from becoming the world capital of cryptocurrency mining in the years to come. It appears that in 2020, China mined 67% of all bitcoins. In 2021, this figure dropped to zero when the State Council completely banned cryptocurrency mining in China. This decision had implications: for example, it allowed the United States to become the world leader in the mining sector.
Other attacks on the crypto sector in 2021 included the banning of crypto trading and a series of crypto exchange shutdowns. The news triggered a 7% drop in the price of Bitcoin. The timing of the crypto crackdown coincides with new developments in China’s CBDC project, the digital yuan. As of November 2021, cryptocurrencies were effectively banned in China.
While rumors of China’s soon-to-be complete ban on cryptocurrencies were circulating in 2024, the new restrictions did not catch investors off guard and the price of BTC was not affected.
China’s anti-crypto laws usually cause BTC sales, but do they incentivize lawmakers in other countries to hinder crypto in their countries? Let’s do a little fact-checking.
Are other countries following China’s lead in regulating cryptocurrencies?
China is not responsible for cracking down on cryptocurrencies around the world, nor is it pioneering an outright hostile approach towards decentralized digital currency. Nevertheless, as one of the most influential countries in the world, it may seem like a role model for governments who do not want cryptocurrencies in their countries. Is this the case?
The answer is rather negative. China’s influence gives anti-crypto laws impact on the crypto market and media. But it cannot be said that the country’s lawmakers are world leaders in the fight against cryptocurrencies.
Turkey banned crypto payments several months before China in 2021. Egypt created legal obstacles to cryptocurrency mining and trading as early as 2020. Algeria banned all activity involving cryptocurrencies in 2018. Morocco banned crypto trading in 2017, when China took its first steps towards full cryptocurrency. to forbid. It must be said that since January 2025, the central bank of Morocco has been considering the legalization of cryptocurrencies. Bangladesh banned crypto in 2014, following earlier bans by Bolivia and Ecuador.
After all these examples, it is not difficult to say that China prefers to explore the effects of banning crypto by drawing on the experiences of other countries rather than serving as a model in this regard.
