China Crypto Ban: What’s Really Happening Underground in 2025

When China banned cryptocurrency trading and mining in 2021, it didn’t kill crypto—it forced it underground. The China crypto ban, a sweeping government policy that prohibits financial institutions from processing crypto transactions and shuts down mining operations. Also known as crypto prohibition in China, it was meant to protect the yuan and control capital flight. But instead of disappearing, crypto adapted—quietly, dangerously, and at massive scale. Today, even with strict surveillance and bank monitoring, an estimated $86.4 billion in crypto trades still flow through China every year, mostly via peer-to-peer (P2P) platforms and offshore wallets.

The PBOC crypto rules, the central bank’s enforcement framework that blocks banks, payment apps, and exchanges from handling digital assets are strict, but not foolproof. Traders use cash-based P2P marketplaces, encrypted messaging apps like Telegram, and even local merchants who accept BTC for goods to move value. Some trade through Hong Kong or use VPNs to access foreign exchanges. Others rely on stablecoins like USDT to preserve wealth amid inflation and currency controls. The underground crypto trading, the hidden network of individuals and small groups who bypass state restrictions using informal, decentralized methods isn’t just surviving—it’s thriving because it fills a real need: financial freedom outside the state-controlled system.

It’s not risk-free. People have been fined, had bank accounts frozen, or worse—arrested—for trading crypto in China. But for many, especially in cities like Shenzhen and Chengdu, the risk is worth it. They’re not speculating on moonshots; they’re protecting savings from devaluation, sending money to family abroad, or accessing global markets blocked by the government. The crypto restrictions China, the legal and technical barriers imposed by authorities to isolate the population from decentralized finance have created a parallel economy—one that’s harder to shut down than the authorities admit.

What you’ll find below aren’t just news updates. These are real stories from inside the ban: how traders stay hidden, what tools they use, why stablecoins are the real winners, and what happens when the state catches up. This isn’t theory. It’s survival. And it’s still going strong in 2025.