China has one of the most detailed — and most frequently misunderstood — legal frameworks for blockchain technology in the world. The country has simultaneously banned cryptocurrency trading and mining while aggressively promoting blockchain infrastructure for government services, trade finance, and supply chain management. For foreign fintech companies, this dichotomy is not a contradiction — it is the policy. Understanding where the lines fall is the difference between a viable market entry and an inadvertent regulatory violation.
This guide walks through China’s current blockchain regulatory landscape as it stands in 2026: what is permitted, what is prohibited, which agencies have jurisdiction, and how foreign technology companies can engage with China’s blockchain ecosystem legally and strategically.
The Core Distinction: Blockchain Yes, Cryptocurrency No
China’s regulatory framework makes a sharp distinction between blockchain as infrastructure technology and cryptocurrency as a financial instrument. The former is actively encouraged; the latter is banned for most practical purposes.
In September 2021, China’s State Council coordinated a sweeping crackdown involving ten government agencies — including the People’s Bank of China (PBOC), the China Securities Regulatory Commission (CSRC), and the Ministry of Public Security — that effectively banned all cryptocurrency transactions, exchanges, and mining operations by entities and individuals in China. The joint notice classified virtual currency-related business activities as illegal financial activities, giving enforcement teeth to a ban that had been building since 2017.
However, that same regulatory environment has been paired with the Blockchain Service Network (BSN) — a state-backed infrastructure initiative launched in 2020 that provides standardized, permissioned blockchain connectivity across Chinese government departments, state enterprises, and select commercial applications. The BSN is not a cryptocurrency network. It is a managed, identity-verified infrastructure layer designed to enable smart contracts, digital credentials, and cross-institutional data sharing without the speculative or decentralized finance elements that regulators have targeted.
The Blockchain Information Services Regulation
The primary regulatory instrument governing commercial blockchain operations in China is the Blockchain Information Services Management Regulations, issued by the Cyberspace Administration of China (CAC) and effective since February 2019. This regulation requires any entity providing blockchain-based information services to Chinese users to register with the CAC before launching operations.
Key requirements under the Regulation include:
- CAC Registration: Blockchain service providers must submit technical documentation, organizational information, and a real-name verification system for users. Registration is renewed periodically and can be revoked.
- Real-Name User Verification: Users must be identified using government-issued ID or mobile number verification (known as shiming zhuce, or real-name registration). Anonymous blockchain transactions are not permitted.
- Content Compliance: Blockchain platforms may not facilitate the storage, dissemination, or transmission of content that violates Chinese law — including content that undermines national security, spreads rumors, or violates intellectual property rights.
- Data Localization: Logs and user data must be retained domestically for a minimum of six months and made available to authorities on request.
As of 2026, the CAC maintains a public list of registered blockchain information service providers. Foreign companies wishing to offer blockchain services to Chinese users must either establish a local entity or partner with a registered Chinese provider. For more on China’s broader data compliance environment, see our guide to China’s Cybersecurity Law and our overview of China’s Data Localization Laws.
The Digital Yuan (e-CNY) and Its Role for Foreign Companies
China’s central bank digital currency — officially the Digital Yuan or e-CNY — is the PBOC’s response to the vacuum created by banning private cryptocurrencies. The e-CNY is a permissioned, centrally issued digital currency that operates on a two-tier system: the PBOC issues to commercial banks, which then distribute to consumers and businesses through apps like those operated by Bank of China, ICBC, and WeChat Pay’s integrated wallet.
For foreign companies operating in China, the e-CNY creates both opportunities and compliance considerations. Pilot programs have expanded to over 26 cities and regions, and since 2023 the e-CNY has been accepted at major retail chains, ride-hailing platforms, and select cross-border trade settlement pilots in the Shanghai Free Trade Zone and Hainan Free Trade Port.
Foreign firms with China operations may be required to accept e-CNY payments in certain regulated sectors as adoption expands. The PBOC has indicated that e-CNY interoperability with existing payment infrastructure (Alipay, WeChat Pay) will be enhanced, meaning the technical integration burden on foreign businesses should remain manageable. Consult China’s PBOC Digital Currency Research Institute for updated pilot participation guidelines.
Cross-Border Settlement Pilots
The PBOC has been testing e-CNY for cross-border trade settlement in limited corridors, particularly with Hong Kong (mBridge initiative) and as part of broader Belt and Road financial infrastructure. For US and European exporters with Chinese buyers, this is a developing area worth monitoring. Early adopters in the Shanghai FTZ pilot have reported faster settlement times and reduced FX conversion friction for RMB-denominated contracts — a meaningful operational advantage for frequent traders.
NFTs, Web3, and What Is (and Isn’t) Allowed
The global NFT and Web3 boom created significant regulatory ambiguity in China between 2021 and 2023. The current position, clarified through guidance from the China Internet Finance Association, the China Banking Association, and the Securities Association of China in April 2022, is as follows:
- Permissioned NFTs (called “digital collectibles” or shuzi cangpin): These are allowed on compliant Chinese blockchain platforms, with strict conditions. They must be non-transferable or transferable only between verified users on the same registered platform, priced in RMB (not cryptocurrency), and tied to legitimate intellectual property.
- Secondary market trading: Speculative secondary market trading of digital collectibles is prohibited. Platforms that enabled peer-to-peer resale have been shut down or forced to suspend trading features.
- Foreign-based NFT platforms: Offering NFT services to Chinese mainland users from foreign-registered entities without CAC registration violates the Blockchain Information Services Regulation and can trigger enforcement actions including app store removal and domain blocking.
For foreign brands exploring brand engagement through digital collectibles in the Chinese market, the practical path is to partner with a CAC-registered domestic platform such as Tencent’s Huanhe, Alibaba’s Whale Explorer (Huan He), or JD’s Lingxi. These platforms handle all compliance obligations and provide the technical infrastructure. The brand supplies the IP; the platform handles registration, user verification, and sales mechanics.
Enterprise Blockchain: Where Foreign Companies Can Participate
Despite the cryptocurrency restrictions, China is actively seeking foreign participation in enterprise blockchain applications. The following sectors present legitimate engagement opportunities:
Trade Finance
The Ministry of Commerce (MOFCOM) and the People’s Bank have both supported blockchain-based trade finance infrastructure to reduce letter-of-credit fraud, improve invoice verification, and streamline customs documentation. Foreign banks operating in China — including HSBC, Standard Chartered, and Citibank — have participated in blockchain trade finance pilots. For foreign exporters with Chinese buyers, understanding these systems improves receivables speed and reduces counterparty risk.
Our guide on China’s Fintech Ecosystem covers payment and financial technology context that complements any blockchain-specific strategy.
Supply Chain Traceability
Blockchain-based product traceability is legally encouraged and commercially active in China. Sectors including food safety, pharmaceutical authentication, luxury goods, and agricultural products have seen significant blockchain adoption, often with government mandates. The State Administration for Market Regulation (SAMR) has published guidelines encouraging blockchain traceability for food imports as part of China’s updated Food Safety Law implementation. Foreign brands exporting to China can use blockchain-verified provenance as a premium differentiation tool — and in some product categories, it will eventually be required.
Intellectual Property Registration
The China National Intellectual Property Administration (CNIPA) has recognized blockchain-timestamped records as admissible evidence in IP disputes since 2019. This is practically significant: foreign companies can use blockchain platforms to create timestamped evidence of creation dates for copyright materials, design concepts, and trade secrets — providing evidentiary weight in the event of infringement disputes. Several specialized IP blockchain platforms operate in China under CAC registration specifically for this purpose.
US Regulatory Considerations for China-Facing Blockchain Activity
US-based blockchain and fintech companies must also navigate US export controls and sanctions compliance when engaging with China. The Bureau of Industry and Security (BIS) has listed certain cryptographic technologies and blockchain-related software under Export Administration Regulations (EAR) controls — meaning export licensing requirements may apply depending on the technical specifications of the product being deployed in China.
Additionally, OFAC (Office of Foreign Assets Control) sanctions guidance covers cryptocurrency transactions with designated parties in China. US fintech companies operating compliant China-facing services must run OFAC screening on counterparties and cannot facilitate transactions involving sanctioned individuals or entities, regardless of the underlying blockchain platform.
The US-China Business Council publishes updated compliance guidance for fintech operations at uschina.org — a valuable resource for companies navigating the bilateral regulatory intersection. Companies in the fintech or digital asset space may also benefit from reviewing our analysis of China’s Anti-Monopoly Law, which increasingly applies to digital platform operators.
Practical Compliance Checklist for Foreign Blockchain Companies
If your company is considering any blockchain-related activity in China, work through the following framework before engaging:
- Determine your activity category: Are you offering a consumer-facing blockchain information service (requires CAC registration), an enterprise B2B solution (requires local entity), or a supply chain traceability tool (may be structured through a distribution partner)?
- Assess cryptocurrency exposure: Does your product involve any cryptocurrency issuance, trading, custody, or mining? If yes, it cannot be legally offered in mainland China. Hong Kong has a separate licensing regime under the SFC that permits regulated crypto activities.
- Establish a local entity or partner: Foreign companies cannot obtain CAC blockchain registration without a China-registered legal entity. A wholly foreign-owned enterprise (WFOE), joint venture, or a formal partnership with a registered Chinese provider are the typical structures.
- Implement real-name verification: Any user-facing blockchain platform must integrate with China’s national ID verification APIs or mobile number-based verification systems. This is a hard technical and legal requirement.
- Data localization: Ensure your architecture can store required logs and user data on servers physically located in mainland China, and establish a data security compliance process aligned with China’s Data Security Law and Personal Information Protection Law (PIPL).
- US export control review: Before deploying cryptographic or blockchain software in China, conduct an EAR classification review and determine whether an export license or license exception applies.
The Outlook: Regulatory Evolution in 2026 and Beyond
China’s blockchain regulatory framework is maturing rather than liberalizing. The trajectory points toward greater standardization — more formal licensing tiers, expanded BSN infrastructure, and deeper integration of the e-CNY into cross-border trade settlement. The cryptocurrency ban shows no signs of reversal on the mainland, and enforcement against offshore platforms serving Chinese users has intensified.
For foreign companies, the strategic implication is clear: the China blockchain opportunity is not in decentralized finance. It is in permissioned enterprise infrastructure, supply chain integrity, digital identity, and trade finance automation — sectors where foreign technical expertise is welcomed, provided the regulatory architecture is respected. Companies that approach China’s blockchain market with compliance-first thinking, local partners, and a clear-eyed understanding of what is and is not permitted will find genuine commercial openings in a market that is building serious blockchain infrastructure at scale.
GreatHandshake.com provides general commercial and regulatory information for educational purposes. This article does not constitute legal advice. Consult qualified legal counsel before making market entry or compliance decisions.