Is There Any Crypto That Can Be Used in China?

Current State of Cryptocurrency in China

As of 2024, the use of cryptocurrencies in China remains heavily restricted due to the government's stringent regulatory stance. In 2017, China implemented a comprehensive ban on cryptocurrency transactions and exchanges, which has been rigorously enforced and expanded in subsequent years (Freeman Law, n.d.). This ban extends to all forms of cryptocurrency trading, including over-the-counter (OTC) platforms, foreign exchanges accessible to Chinese citizens, and peer-to-peer (P2P) trading (Cryptocurrency.Law, 2024).

Legal Status of Cryptocurrencies

Despite the strict regulations, it's important to note that holding cryptocurrency is not explicitly illegal in China (Freeman Law, n.d.). However, the practical use of cryptocurrencies for transactions or as a medium of exchange is effectively prohibited. The Chinese government has cited concerns about financial risks, energy consumption of mining operations, and potential use of cryptocurrencies in illicit activities as reasons for their restrictive approach (Cryptocurrency.Law, 2024).

Digital Yuan: China's Official Digital Currency

While traditional cryptocurrencies are banned, China has been at the forefront of developing its own central bank digital currency (CBDC), known as the Digital Yuan or e-CNY. The Digital Yuan is designed to be a digital version of China's official currency, fully regulated and backed by the People's Bank of China (PBoC) (Wikipedia, n.d.). Unlike decentralized cryptocurrencies, the e-CNY is under complete government control and is intended to replace some of the cash in circulation.

As of 2024, the Digital Yuan has undergone extensive testing and is being gradually rolled out across China. It can be used for various transactions, including purchases at stores like Starbucks and McDonald's, as well as on online shopping platforms like JD.com (Wikipedia, n.d.). The e-CNY is designed to move instantaneously in both domestic and international transactions, aiming to be cheaper and faster than existing financial transactions (Wikipedia, n.d.).

Underground Crypto Activity

Despite the ban, there is evidence of continued cryptocurrency activity in China. In late 2021, data showed a number of active mining host IPs and mining pool service IPs still operating within the country (Statista, n.d.). This suggests that some crypto-related activities persist underground, though at a much-reduced scale compared to before the crackdown.

Future Outlook

While the current regulatory environment in China remains hostile to cryptocurrencies, some experts speculate about potential changes in the future. Brock Pierce, a crypto investor, has suggested that it's "inevitable" for China to eventually reopen to crypto, though the timeline remains uncertain (Forbes, 2024). However, as of now, there are no official indications of China relaxing its cryptocurrency regulations.

Conclusion

In conclusion, as of 2024, there is no cryptocurrency that can be legally used for transactions in China due to the government's comprehensive ban. The only digital currency officially recognized and promoted by the Chinese government is the Digital Yuan (e-CNY), which is a centralized digital currency rather than a decentralized cryptocurrency. While holding cryptocurrencies is not explicitly illegal, their practical use for transactions is prohibited. The future of cryptocurrency in China remains uncertain, with the government maintaining its focus on developing and promoting its own digital currency system while continuing to restrict decentralized cryptocurrencies.