Recently, I’ve been paying attention to the changes in cryptocurrency policies in China and have noticed an interesting phenomenon.

Speaking of which, China used to be an absolute leader in the cryptocurrency space. After Bitcoin started gaining attention in 2013, a wave of mining companies and hardware manufacturers emerged rapidly domestically. Between 2017 and 2020, China’s Bitcoin hash rate share reached as high as 60-75%. During the same period, several exchanges that later became global giants were also born, and these platforms still hold significant positions in the international market.

But after 2021, the situation took a sharp turn. First, financial institutions were banned from handling cryptocurrencies, then mining was prohibited, and finally, in September, the harshest blow came—an outright ban on all cryptocurrency trading. This crackdown caused many miners and exchanges to relocate to Kazakhstan, Russia, and other places, and China’s dominance in the cryptocurrency field has since disintegrated.

Interestingly, despite the strict bans on the surface, the Chinese government might still hold a considerable amount of cryptocurrency assets in secret. The main source is assets confiscated from the PlusToken Ponzi scheme, estimated at around $2.2 billion. On-chain analysts believe these assets may have already been transferred and liquidated, but the authorities have not officially confirmed this.

The current situation is even more intriguing. Last year, the U.S. passed the “Stablecoin Act,” further solidifying the dollar’s position in global digital payments. China responded by ramping up efforts to promote the digital yuan, aiming to reduce reliance on the dollar. Currently, the renminbi accounts for only 2.9% of global payments, leaving a large gap.

What’s most worth noting here is Hong Kong’s role. In August 2025, Hong Kong introduced the “Stablecoin Ordinance,” establishing a comprehensive licensing system. Some analysts believe that the central government is actually using Hong Kong as a controlled testing ground to observe the risks and opportunities of cryptocurrencies and digital assets. While maintaining strict bans on cryptocurrencies on the mainland, Hong Kong allows regulated innovation—this dual-track approach is quite clever.

So, the current situation is: mainland China maintains zero tolerance toward cryptocurrencies, but it has already begun to pay attention to their role in global finance. Hong Kong is emerging as an innovation hub for digital assets in the Greater China region. Whether this system will influence mainland policies in the future depends on the results of Hong Kong’s experiments. For those interested in this field, Hong Kong’s development is definitely worth following.