Can Businesses in China Accept Crypto Legally in 2026?

As of 2026, businesses in mainland China cannot legally accept cryptocurrency under any circumstances. It’s not a gray area. It’s not a loophole. It’s a full criminal prohibition backed by the full force of the state.

What the Law Actually Says

In May 2025, China passed a sweeping law that made it illegal to own, trade, or accept any form of cryptocurrency-including Bitcoin, Ethereum, or stablecoins like USDT. This wasn’t just a regulatory update. It was a complete legal reset. Holding crypto is now a criminal offense. Accepting it as payment? That’s a felony.

The law targets every possible entry point. If your business takes crypto for goods, services, or even donations, you’re breaking the law. If your website has a Bitcoin payment button, even if no one uses it, you’re at risk. If your accounting software logs crypto transactions, you’ve created evidence against yourself.

This isn’t about taxes or reporting. It’s about total elimination. The government doesn’t want to regulate crypto. It wants to erase it from the financial system entirely.

Why China Banned Crypto-And Why It Won’t Change

The reason is simple: control. China’s government sees decentralized digital money as a direct threat to its authority over money.

Cryptocurrencies let people move value without permission. They let individuals bypass capital controls. They let businesses avoid state surveillance. And they compete with the digital yuan-the official state-backed currency that gives the government full visibility into every transaction.

The digital yuan isn’t just a new payment app. It’s a tool for financial dominance. Every yuan spent digitally leaves a traceable record. Every transfer is monitored. Every business is accountable. Crypto doesn’t allow that. So it had to go.

The ban didn’t happen overnight. It was a decade-long campaign:

• 2013: Banks banned from handling Bitcoin
• 2017: ICOs and domestic crypto exchanges shut down
• 2021: All crypto transactions declared illegal; mining banned nationwide
• 2024: Arrests began for unlicensed crypto activity
• 2025: Personal ownership and business acceptance criminalized

Each step tightened the noose. The 2025 law was the final knot.

How Enforcement Works

You might think, “What if I use a third-party service?” Or, “What if I convert crypto to cash quickly?”

It doesn’t matter.

China’s financial system is wired to detect crypto activity. Banks and payment processors like Alipay and WeChat Pay are legally required to scan every transaction for signs of virtual currency movement. If a payment comes from a wallet linked to a crypto exchange-even if it’s disguised as a regular bank transfer-it gets flagged.

The Ministry of Public Security and the Cyberspace Administration work together to track digital trails. They use AI to spot patterns: sudden deposits from overseas wallets, frequent micro-transactions matching crypto exchange fees, or transfers to known crypto addresses.

If your business gets flagged, you don’t get a warning. You get an investigation. Then a fine. Then asset seizure. Then criminal charges.

There are no exceptions. Not for small shops. Not for tech startups. Not for foreign companies operating in China. The law applies equally to everyone.

Hong Kong Is Different-But It Doesn’t Help Mainland Businesses

Hong Kong still allows crypto exchanges, custody services, and licensed trading. Some mainland investors buy shares in Hong Kong-listed crypto firms to get exposure. But that’s not the same as accepting crypto as payment.

If you’re a business in Shenzhen, Shanghai, or Guangzhou, Hong Kong’s rules don’t apply to you. You’re under mainland China’s jurisdiction. Even if you operate an online store that ships to Hong Kong, if your business is registered in mainland China, you’re still bound by the ban.

Trying to route payments through Hong Kong to avoid the law? That’s considered capital flight-a serious offense. Authorities treat it as an attempt to circumvent financial controls, which carries heavier penalties.

What Happens If You Try Anyway?

Some businesses still try. They use peer-to-peer exchanges. They hide transactions in gift cards or NFTs. They use offshore wallets.

It doesn’t work.

In 2024, over 1,200 people were arrested in China for unlicensed crypto activity. Most were small business owners who accepted crypto to avoid bank fees or attract tech-savvy customers. They weren’t running mining farms. They weren’t running exchanges. They were just trying to get paid.

The consequences? Fines up to 10 times the value of the crypto received. Asset freezes. Business license revocation. Jail time.

One case in Chengdu involved a café owner who accepted Bitcoin for coffee. He thought it was harmless. The transaction was under $200. He was arrested. His café was shut down. His personal bank accounts were frozen. He spent six months in detention before being released with a permanent criminal record.

This isn’t rare. It’s routine.

What Can Businesses Use Instead?

The only legal digital currency for business transactions in mainland China is the digital yuan (e-CNY).

The government has rolled out the digital yuan across 26 cities. Businesses can integrate it through approved apps and payment terminals. It works like a mobile wallet. It’s fast. It’s secure. And it gives the government full visibility-exactly what they want.

No anonymity. No decentralization. No risk.

For businesses, this means adapting. You can’t use crypto. But you can use the digital yuan. Many retailers, restaurants, and service providers have already switched. The infrastructure is there. The incentives are there. The law leaves no room for alternatives.

The Global Context: China Is an Outlier

Most countries are moving toward regulating crypto, not banning it.

The U.S. is creating clear rules for exchanges and token issuers. Singapore has a licensing system for crypto firms. The EU has MiCA, a comprehensive framework for digital assets. Even South Korea and Japan have legal pathways for businesses to accept crypto with proper compliance.

China is the only major economy that has chosen total prohibition.

That’s intentional. It’s not about safety or stability. It’s about power. The government doesn’t want competition. It wants monopoly.

What’s the Future?

There’s no sign the ban will loosen. The digital yuan is now the centerpiece of China’s financial strategy. It’s being tested for cross-border trade, social welfare payments, and even tax collection.

The infrastructure is expanding. The technology is improving. The legal framework is locked in.

For businesses in mainland China, the message is clear: crypto is dead. The digital yuan is the only future.

If you’re running a business here, your only legal option is to accept the digital yuan. Anything else isn’t just risky-it’s illegal. And the consequences aren’t worth the gamble.