Recent rumors about a new cryptocurrency ban in China have caused market panic, but the information turned out to be false.
History of cryptocurrency bans in China
China has a long history of strict policies regarding cryptocurrencies. In 2013, financial institutions were prohibited from conducting Bitcoin transactions. In 2017, all domestic exchanges were closed, and Initial Coin Offerings (ICOs) were banned. The most stringent ban was implemented in 2021, prohibiting any use of cryptocurrency, including trading and mining. Recent rumors of a new ban in 2025 are unfounded, as no new laws have been enacted.
Reasons for the 2021 cryptocurrency ban
Several factors influenced the Chinese government's decision to ban cryptocurrency. Firstly, the volatility of crypto assets is seen as a threat to the country's financial system. Secondly, cryptocurrencies allowed citizens to circumvent capital controls and transfer funds abroad. Furthermore, China aims to limit the energy consumption associated with mining, which was another factor in the ban.
Impact of misinformation on the market
Misinformation, such as the recent rumors of a ban in 2025, can lead to unnecessary market panic. A 2023 study found that such rumors result in significant price spikes in cryptocurrency. The actual bans imposed in 2021 remain in place, and investors should rely on official sources for information.
China has not issued any new cryptocurrency bans in 2025. Existing restrictions from 2021 are still active. Investors should be cautious and rely on credible information sources.
