Catenaa, Sunday, January 12, 2025 – China has unveiled strict new rules aimed at tightening control over cross-border cryptocurrency transactions, signaling an intensified regulatory crackdown amid economic challenges. The measures require banks to rigorously track the identities of individuals and institutions involved in crypto activities, targeting potential risks such as money laundering, cross-border gambling, and underground banking.
The South China Morning Post reported that these regulations also prohibit using the yuan to buy cryptocurrencies for conversion into foreign currencies. Legal experts, such as Liu Zhengyao of ZhiHeng, noted the rules provide a stronger basis to penalize crypto trading, making it nearly impossible to bypass Chinese restrictions.
China’s paradoxical stance on cryptocurrencies remains striking. Despite banning crypto trading in 2019, the country holds approximately 194,000 Bitcoin—worth an estimated $18 billion—acquired through judicial seizures, making it the second-largest Bitcoin holder globally.
While the government justifies its crackdown on mining to reduce greenhouse gas emissions, seized assets remain under its control, fueling speculation about a potential strategic shift. Former Binance CEO Changpeng Zhao and ex-BitMex head Arthur Hayes suggested that China could pivot to adopting Bitcoin as part of its reserve strategy, potentially reshaping global crypto markets.
For now, Beijing’s tightened grip on digital assets underscores its intent to curb illicit financial activities, while paradoxically maintaining a significant influence on the cryptocurrency market.
