Crypto Adoption in China Despite Ban: How It's Still Thriving in 2026

China banned cryptocurrency in 2021. No trading. No mining. No exchanges. Officially, it’s illegal. Yet, crypto isn’t gone-it’s just gone underground. And it’s bigger than ever.

Over 59 million people in China are still using cryptocurrency in 2026. That’s more than the entire population of Australia. They’re not breaking the law because they’re reckless. They’re doing it because they have no other choice-and because crypto solves real problems the government won’t let them solve openly.

How Crypto Survived the Ban

The Chinese government didn’t just say "no" to crypto. They went all in: shutting down mining farms, blocking exchanges, freezing bank accounts linked to crypto, and even pressuring tech companies to block crypto wallets. But they didn’t ban the internet. They didn’t ban smartphones. And they didn’t ban people’s desire to protect their money.

So how are they still trading? Three ways: offshore exchanges, peer-to-peer deals, and clever tech workarounds.

Most Chinese crypto users access platforms like Binance, Bybit, and OKX through virtual private networks (VPNs). A 2024 Chainalysis report found that 78% of Chinese crypto traders rely on VPNs to bypass government firewalls. It’s not perfect-some VPNs get blocked-but enough work to keep the flow going.

Then there’s peer-to-peer (P2P) trading. Over 63% of crypto transactions in China happen directly between people, not on exchanges. The most common method? WeChat and QQ groups. Buyers and sellers negotiate prices, use escrow services to hold funds, and transfer money through bank transfers or mobile payments. It’s messy, but it works. About 45% of all P2P volume in China flows through these channels.

And then there’s the tech. Developers in China have built apps like "CryptoBridge" and "Silk Road Wallet"-not official, not approved, but downloaded over 8.7 million times on third-party Android stores. These apps use encrypted channels and domain fronting to hide traffic from government monitors. They’re not foolproof, but they’re good enough for millions.

Why People Keep Using Crypto

It’s not about speculation. It’s about survival.

China’s capital controls are strict. You can’t easily move money out of the country. But if you need to send tuition to your kid studying in Australia, or pay for medical treatment overseas, or just protect your savings from inflation, traditional banks are slow, expensive, and inflexible.

Enter stablecoins. USDT (Tether) is the go-to. In Q2 2025, 38.7% of all crypto transactions in China were in stablecoins-up from 21.7% in 2024. One user on a WeChat crypto forum summed it up: "Sending USDT to my daughter in Australia saves me 87% in fees. Takes 15 minutes. Banks take three days and charge me a fortune."

For many, crypto isn’t a gamble-it’s a workaround. A tool. A lifeline.

The e-CNY Paradox

Here’s the twist: while the government bans private crypto, it’s pushing its own digital currency-the e-CNY (digital yuan). By the end of 2024, over 260 million individual wallets and 15.5 million corporate wallets were active. In the first half of 2025 alone, the e-CNY processed 1.8 trillion yuan ($248 billion) in transactions.

It’s being tested everywhere: public transport, telecom bills, government salaries, even B2B trade settlements. The government says it’s about efficiency, financial control, and modernization. But for citizens? It feels like surveillance.

The e-CNY is traceable. Every transaction is logged. Every purchase tracked. Crypto? Anonymous. Untraceable. At least, mostly.

That’s the real tension: the state wants total control over money. Crypto offers freedom from it. And millions are choosing freedom-even if it’s risky.

Who’s Using Crypto in China?

It’s not random. The users are very specific.

Age matters. The biggest group? People aged 25-34. They make up 37.5% of Chinese crypto users-far higher than the global average of 31%. Older folks? Only 12.8% of users are over 45. That’s half the global rate. Young people in China grew up with smartphones, internet access, and a distrust of traditional institutions. Crypto feels natural to them.

Gender? Still lopsided. 89.2% of users are male. That’s even more skewed than the global average of 86.9%. But that gap is slowly closing. More women are joining, especially in tech hubs like Shenzhen and Hangzhou.

Location? Urban centers dominate. Shanghai, Beijing, Guangzhou, and Shenzhen account for over 60% of activity. Rural areas? Barely on the radar. Crypto needs tech access, fast internet, and a network of users. That’s not everywhere in China.

The Risks Are Real

Using crypto in China isn’t just risky-it’s dangerous.

Account freezes are common. A Reddit survey from April 2025 found that 68% of Chinese crypto users had their bank accounts frozen at least once because of crypto activity. The average loss? 23,500 yuan ($3,250). Some lost much more.

Scams are rampant. The China Cybersecurity Association reported $165 million in crypto-related fraud losses in Q1 2025 alone. Fake P2P platforms, fake wallet apps, phishing links-they’re everywhere. Many users get burned before they even learn how to protect themselves.

And the government isn’t backing off. In May 2025, China’s State Administration of Foreign Exchange issued a warning targeting "virtual asset service providers facilitating capital flight." They shut down 27 P2P platforms. In July, they froze 1,287 bank accounts and slapped fines totaling 237 million yuan ($32.6 million).

Yet, 82% of users said they’re still trading-even more than last year. 45% increased their investment. That’s not stubbornness. That’s conviction.

What’s Next? A Softening Ban?

Is China going to lift the ban? Probably not. But it might change how it enforces it.

There are signs. In July 2025, the Shanghai State-owned Assets Supervision and Administration Commission quietly noted in meeting minutes: "The rapid evolution of digital assets necessitates more nuanced regulatory approaches."

That’s not a policy change. But it’s a crack in the wall. Experts at Bernstein predict a 65% chance China will adopt a "controlled access" model by 2027-like India’s 30% tax on crypto gains. Not legalization. Not freedom. But tolerance with rules.

Meanwhile, Hong Kong is becoming the gateway. Seven licensed exchanges operate there now, including HashKey and OSL. In April 2025 alone, they processed $14.3 billion in trading volume. Many Chinese users use Hong Kong accounts to trade legally-while staying in mainland China.

And institutions? They’re watching. 26% of ETF investors in Greater China plan to buy crypto ETFs in 2025. That’s not retail. That’s institutional money. And if institutions are getting ready, the government can’t ignore them forever.

The Bottom Line

China’s crypto ban looks absolute on paper. In practice? It’s a game of cat and mouse.

The government controls the official money. But millions are building their own financial system-using encrypted apps, P2P networks, offshore exchanges, and stablecoins. They’re not trying to overthrow the system. They’re just trying to protect their money, send money abroad, and hedge against inflation.

And as long as the e-CNY can’t solve those problems, crypto will keep thriving. Not because it’s legal. But because it works.