China: The Bitcoin Ban That Kept Coming Back

On 5 December 2013 the People's Bank of China, the country's central bank and the equivalent of the US Federal Reserve, told banks and payment companies they could no longer handle Bitcoin. Bitcoin had just passed $1,100 for the first time. By the middle of the month it had lost about half its value. It was the first time "China bans Bitcoin" moved the market. It would not be the last.

Over the next 13 years Beijing cracked down on Bitcoin four separate times, and in between the headline was recycled whenever a province or ministry tightened a rule. Crypto traders turned the phrase into a running joke. Each ban was real. Each crash was real. And each time, the price eventually went higher than before.

2013 and 2017: the banks, then the exchanges

The 2013 notice, issued by the central bank with four other agencies, did not make it illegal for individuals to own Bitcoin. It cut the pipes: banks could not process payments for it, so exchanges struggled to take money in or pay it out.

The second crackdown came on 4 September 2017 and went after ICOs. An ICO, or initial coin offering, was a way for a start-up to raise money by selling its own new digital tokens directly to the public, like a share sale with no prospectus and no regulator checking anything. Seven Chinese regulators declared them illegal fundraising. Days later the big Chinese exchanges, including BTCChina, Huobi and OKCoin, were told to stop trading for local customers. Bitcoin fell from nearly $5,000 to about $3,000 in two weeks. By December 2017 it was close to $20,000. Much of the trading simply moved offshore, and Huobi and OKCoin (later OKX) rebuilt themselves outside the mainland.

2021: the one that actually moved things

The third crackdown was the big one, because it hit mining. Bitcoin mining is the work of running specialised computers that process transactions and are paid in new bitcoin; it is closer to running a power-hungry factory than to digging anything up. Hash rate is the total computing power doing that work, the network's combined output, and a country's share of hash rate is its share of the factory floor. In September 2019 the Cambridge Centre for Alternative Finance estimated China's share at 75.5%, thanks to cheap coal power in Xinjiang and Inner Mongolia and cheap hydropower in Sichuan and Yunnan. By April 2021 it had already slipped to about 46%.

On 21 May 2021 the State Council's financial stability committee, chaired by Vice Premier Liu He, said it would "crack down on Bitcoin mining and trading behaviour". Within weeks provincial governments ordered mining farms shut. Miners loaded machines onto trucks and planes. Global hash rate fell by roughly half between May and July, the largest move of computing power the network had seen. Much of it went to the United States, especially Texas, as well as Kazakhstan and Russia. Bitcoin fell from about $64,000 in April to under $30,000 in July, helped down by Elon Musk's U-turn on Tesla accepting it.

On 24 September 2021 the central bank and nine other agencies went further and declared every crypto-related transaction in mainland China illegal. In November 2021 Bitcoin hit a then record of about $69,000.

Cambridge's tracker showed China's share at zero in July and August 2021. It did not stay there. By January 2022 the same index put China at about 21%, second only to the United States, as miners quietly plugged back in. Data from Hashrate Index, a mining research service, put China at about 14% of the network in late 2025, third behind the United States and Russia, with the ban still formally in force. Sales figures from the Chinese rig maker Canaan pointed the same way: more than half of its sales in mid-2025 went to China, according to Reuters.

2026: the ban, rewritten

The fourth crackdown came on 6 February 2026. A notice led by the central bank, known as Yin Fa No. 42, replaced the 2021 rules and restated that crypto has no legal status as money and that crypto business on the mainland is illegal financial activity. It went further than any earlier ban in one direction: it barred anyone, at home or abroad, from issuing stablecoins pegged to the yuan without approval. A stablecoin is a digital token meant to hold a steady value, usually one dollar or one unit of a currency, the crypto version of a money market fund share. The notice also set rules for tokenised real-world assets, digital tokens that represent things like bonds or property, putting offshore tokens backed by Chinese assets under the securities regulator's vetting.

Beijing had already reportedly told Ant Group and JD.com in late 2025 to drop plans to issue stablecoins in Hong Kong, which runs its own licensed crypto market. The mainland message has not changed since 2013. What changes is the list of things it covers.

Four bans in 13 years, and the price was higher after every one of them. The ban that mattered was the 2021 mining ban, and even that one only moved the miners, many of them back home, quietly.