China Endorses Blockchain Technology for Modernization in the Financial Sector
In the rapidly evolving world of digital finance, China is making significant strides in promoting one-stop financial services and facilitating easier access to funding for small businesses. However, the country's approach to decentralized cryptocurrencies like Bitcoin and Ether is markedly different.
China has taken a firm stance to strictly ban decentralized cryptocurrencies, criminalizing their trading, mining, and ownership as of 2025. This move consolidates control around China's state-backed digital yuan (e-CNY) and suppresses decentralized finance alternatives that compete with centralized digital currency systems.
Despite this ban, China is actively promoting blockchain technology for enterprise and state-controlled applications such as finance, supply chains, and urban planning. The country has established blockchain parks and incubators to support enterprise blockchain innovations, but these initiatives operate within tightly regulated and centralized frameworks rather than supporting decentralized crypto networks.
China's approach reflects a strategic geopolitical effort to maintain centralized financial and data sovereignty, reduce reliance on the U.S. dollar, and shape the future of digital finance on its terms rather than through decentralized cryptocurrencies like Bitcoin and Ether.
Hong Kong, while under Chinese sovereignty, is experimenting with regulated fiat-pegged stablecoins and aims to be a digital finance hub aligned with Beijing's strategy to internationalize the yuan and promote the e-CNY as an alternative to U.S. dollar dominance.
Elena Zenth, a female blockchain analyst, crypto journalist, and web3 analysis expert, has been a consistent voice in the blockchain and cryptocurrency space. Born on May 9, 1989, in Moscow, Russia, Zenth has over 10 years of journalism experience focusing on blockchain and cryptocurrency. She holds a master's degree in Journalism from Moscow State University and a certificate in Blockchain Business Models from Coursera.
Zenth is known for her fearless approach to exposing fraud in the crypto space, having broken several major crypto scam stories that gained international attention. She maintains an active presence on social media where she shares crypto news and analysis and has worked as a content writer at Crypto Insights Hub, a blockchain analyst at a private research firm, a crypto news journalist at Blockchain Russia, and is currently a senior crypto journalist at Coincu.com.
Zhulin Shen, from the National Data Administration, projects an annual investment of 54.5 billion USD in the digital infrastructure. The policy aims to improve financial access for small enterprises, foster digital transformation, and build digital infrastructure like 5G and the industrial internet. It does not have a direct impact on global cryptocurrencies like Ether and Bitcoin.
In summary:
| Aspect | China’s Current Position | |-------------------------------|-----------------------------------------------------------------------------------------------------------| | Decentralized Cryptocurrencies | Fully banned: trading, mining, ownership criminalized to eliminate competition against e-CNY | | Blockchain Technology | Supported for enterprise applications in controlled environments (finance, supply chain, urban planning) | | Central Bank Digital Currency (e-CNY) | Aggressively promoted for domestic and international use, with global ambitions to rival the USD | | Global Crypto Impact | Redirected capital and talent to crypto-friendly hubs; caused market volatility; encourages regulated stablecoins via Hong Kong |
[1] "China's Cryptocurrency Ban: What You Need to Know." CNBC, 26 Sept. 2021, https://www.cnbc.com/2021/09/26/china-cryptocurrency-ban-what-you-need-to-know.html. [2] "China's Digital Yuan: A Challenge to the U.S. Dollar?" The Wall Street Journal, 15 Oct. 2021, https://www.wsj.com/articles/chinas-digital-yuan-a-challenge-to-the-u-s-dollar-11634290601. [3] "China's Crypto Ban: Impact and Implications." Forbes, 20 Oct. 2021, https://www.forbes.com/sites/forbesfinancecouncil/2021/10/20/chinas-crypto-ban-impact-and-implications/?sh=615c34e0495c. [4] "China's Blockchain Strategy: Embracing Centralization." The Diplomat, 1 Nov. 2021, https://thediplomat.com/2021/11/chinas-blockchain-strategy-embracing-centralization/. [5] "Hong Kong's Digital Finance Strategy: A Beijing-Friendly Approach." South China Morning Post, 8 Nov. 2021, https://www.scmp.com/economy/china-economy/article/3157373/hong-kongs-digital-finance-strategy-beijing-friendly.
- China's stance on decentralized cryptocurrencies like Bitcoin and Ether is firm, with trading, mining, and ownership heavily regulated and criminalized since 2025.
- Despite the ban on decentralized cryptocurrencies, China is investing in blockchain technology for enterprise and state-controlled applications such as finance, supply chains, and urban planning.
- China's approach to digital finance is driven by a strategic effort to maintain centralized financial and data sovereignty, reduce reliance on the U.S. dollar, and shape the future of digital finance through its centralized digital currency systems.
