Many people are asking, why is the domestic attitude toward virtual currencies so cautious? Watching how freely they are used abroad, but here we have many restrictions. Actually, once you understand this point, it all makes sense: cryptocurrencies are too free, so free that governments find it hard to regulate.

Imagine a scenario to understand better.

Suppose you sell an apartment in a first-tier city and get 5 million yuan. Now you want to convert the money into USD and use it abroad normally.

How do you go through official channels?

The bank's annual foreign exchange quota is $50,000, and the remittance limit is also $50,000—both are barriers.

Want to convert 5 million yuan into $700,000?

Sorry, two options: either wait 14 years, or forget about it.

What about using someone else's quota? Possible, but if you use multiple people's quotas more than a certain number of times, you'll be flagged immediately.

Carrying USD in person? Declaring over $5,000 requires reporting.

Taking RMB abroad? Limit of 20,000 yuan.

Want to transfer RMB directly out? That's even less likely—no money at all.

In other words, all legal channels are tightly blocked.

But cryptocurrencies don't follow these routes at all.

You can find a few people to exchange into stablecoins, and all the coins go directly into your wallet.

One mnemonic phrase, one USB drive, and you can carry millions of yuan "in your pocket" out of the country.

No banks, no declarations, no SWIFT transfers—if you don't say anything, no one knows how much you've taken.

Isn't this better than gold?

Gold still needs physical transport, which is heavy and troublesome.

Cryptocurrency? Just remember 12 words.

This ability to bypass foreign exchange controls is a big deal for any country.

And then there's taxation.

On-chain transactions are anonymous—no real-name verification, no bank statements. You might appear to have modest income in real life, but your wallet on the chain could hold millions, and the tax authorities' four-phase monitoring system wouldn't catch it.

If cryptocurrencies were fully legalized and widely circulated, the tax system would collapse.

So now you understand, right? The issue isn't about technology or price fluctuations.

It's that cryptocurrencies are inherently a "decentralized, cross-border, anonymous" system, which completely conflicts with government regulation logic.

Summary:

It's not that you can't play, but that it shouldn't become a parallel financial system to fiat currency.

Otherwise, foreign exchange, taxation, and fund security become unmanageable.

From a regulator's perspective, you'd make the same choice.