China banned cryptocurrency in 2021. No trading. No mining. No exchanges. The government said it was illegal. Yet, as of 2025, 59 million Chinese citizens are still actively using crypto. Thatâs more than the entire population of Australia. And itâs the second-largest crypto user base in the world - after India.
How Is This Even Possible?
The Chinese government doesnât just discourage crypto. It shuts down servers, freezes bank accounts, and prosecutes people who run exchanges. In 2025 alone, authorities froze over 1,200 bank accounts linked to crypto activity and fined $32.6 million. But bans donât erase demand. They just push it underground. Most Chinese crypto users donât use local platforms. They go offshore. Binance, Bybit, and OKX still serve millions of Chinese customers - even though they officially left the mainland in 2021. How? Through VPNs. About 78% of Chinese crypto traders use virtual private networks to bypass internet filters. Itâs not illegal to use a VPN for personal use, so itâs become the default tool for accessing global crypto markets.Peer-to-Peer Trading Is the Real Engine
Only 22% of crypto trades in China happen on offshore exchanges. The rest? Peer-to-peer (P2P). This is where the real action is. People use WeChat and QQ - Chinaâs main messaging apps - to find buyers and sellers. They donât send money directly. Instead, they use escrow services built into these groups. One person sends CNY to the sellerâs bank account. The seller then releases crypto from their wallet. A third party holds the crypto until payment clears. This system works because itâs decentralized. No platform stores the funds. No exchange handles the transaction. Itâs just two people trusting a middleman. According to a June 2025 analysis by Lightspark, 63% of all crypto transactions in China happen this way. And 45% of those P2P trades use WeChat groups specifically. Itâs informal, fast, and hard for regulators to track.Stablecoins Are the Secret Weapon
Bitcoin? Too volatile. Ethereum? Too slow. The most popular crypto in China right now? USDT - Tether. Stablecoins pegged to the U.S. dollar. Why? Because theyâre used for real life. People send money to family overseas. Students pay for tuition in Australia or the UK. Freelancers get paid for work done for foreign clients. Traditional banks charge 5-10% in fees and take 3-5 days. With USDT, you send money in 15 minutes for less than 1% in fees. Chainalysis data shows stablecoin usage in China jumped from 21.7% of all crypto transactions in 2024 to 38.7% in Q2 2025. Thatâs not speculation. Thatâs utility. People arenât buying USDT to get rich. Theyâre buying it to avoid being robbed by banks.
The Digital Yuan Doesnât Replace Crypto - It Highlights Why People Want It
The Chinese government isnât blind to digital money. It launched the e-CNY, or digital yuan, in 2020. By the end of 2024, over 260 million personal wallets and 15.5 million business wallets were active. In the first half of 2025, the digital yuan processed $248 billion in transactions. But hereâs the catch: the e-CNY is fully traceable. The government knows who you paid. What you bought. When. Where. Itâs not money. Itâs a spending log. Thatâs why crypto thrives. People donât want surveillance. They want privacy. They want control. The digital yuan is a tool for the state. Crypto is a tool for the individual.Young, Tech-Savvy, and Fed Up
Whoâs using crypto in China? Not retirees. Not government workers. Not farmers. Itâs young people. Specifically, those aged 25 to 34. They make up 37.5% of crypto users - higher than the global average. Theyâre the first generation raised with smartphones, the internet, and global access. They see capital controls as outdated. They know how to use a VPN. Theyâve watched their parents lose money to inflation and bank fees. Gender skew is extreme: 89.2% of users are male. Thatâs even higher than the global average of 86.9%. But the real story isnât gender. Itâs access. These users arenât waiting for permission. Theyâre building their own systems.
Scams, Freezes, and Still Going
Itâs not easy. In April 2025, a Reddit survey of 127,000 members of r/CryptoChina found that 68% had their bank accounts frozen because of crypto activity. The average loss per freeze? $3,250. And scams? Theyâre everywhere. In Q1 2025, Chinese authorities reported $165 million lost to crypto fraud. Fake exchanges. Fake P2P deals. âGuaranteed 20% daily returnsâ schemes. Many target older users who donât understand blockchain. Yet 82% of users said they kept trading. And 45% increased their investment in 2025 compared to 2024. Why? Because the alternative - trusting the system - feels riskier.The Governmentâs Contradiction
Hereâs the biggest irony: while the state crushes private crypto, itâs quietly building blockchain infrastructure for its own use. In June 2025, the Shanghai Free Trade Zone launched a blockchain pilot with 14 major banks to handle cross-border trade finance. The goal? Faster settlements, lower costs, better tracking. The same tech used to enable crypto is being used to tighten control. Meanwhile, the Shanghai State-owned Assets Supervision and Administration Commission quietly noted in July 2025 that âthe rapid evolution of digital assets necessitates more nuanced regulatory approaches.â Thatâs bureaucratic code for: âWe might have to change our minds.â Analysts at Bernstein estimate a 65% chance China will soften its stance by 2027 - not by legalizing crypto, but by creating a licensed, monitored version. Think Indiaâs 30% tax on crypto gains. Not freedom. But tolerance.Whatâs Next?
Chinaâs crypto ban isnât working. Itâs not because people are fearless. Itâs because the need is too strong. People need to move money. They need to protect savings. They need privacy. The state can shut down exchanges. It can block websites. But it canât block human behavior. The underground market is growing smarter. Apps like CryptoBridge and Silk Road Wallet are bypassing censorship using encrypted channels and domain fronting. Over 8.7 million downloads happened in just six months in 2025 - all from third-party Android stores, not Google Play. The e-CNY will dominate official payments. But crypto will keep growing in the shadows - not as rebellion, but as reality. For now, China has two digital currencies: one controlled by the state. One controlled by the people. And the people are winning - quietly, carefully, and without permission.Is it illegal to own crypto in China?
Technically, yes. The government bans all cryptocurrency business activities and considers them illegal financial operations. But private ownership isnât explicitly outlawed - it exists in a legal gray zone. You wonât be arrested for holding Bitcoin in a personal wallet, but if you trade it, use it to pay for goods, or send it abroad, you risk having your bank account frozen or facing fines. Thereâs no legal protection if something goes wrong.
How do Chinese people buy crypto if exchanges are banned?
Most use offshore exchanges like Binance, Bybit, or OKX via VPNs. But the majority - over 60% - trade peer-to-peer through WeChat and QQ groups. Buyers and sellers agree on a price, one sends yuan to the otherâs bank account, and the crypto is released through an escrow service. No exchange handles the money. No platform is involved. Itâs decentralized and hard for regulators to stop.
Why do so many Chinese use USDT instead of Bitcoin?
USDT is used mostly for practical reasons, not speculation. Itâs stable - pegged to the U.S. dollar - so it doesnât swing wildly in value. People use it to send money overseas to family, pay for education abroad, or get paid by foreign clients. Itâs faster and cheaper than banks. Sending $5,000 via USDT can cost under $50 and take 15 minutes. Traditional bank transfers cost hundreds and take days.
Can the Chinese government shut down crypto completely?
No - not if people keep using it. The government can shut down exchanges, freeze accounts, and block websites. But it canât stop two people from sending money and crypto through messaging apps. It canât stop someone from downloading a crypto wallet from a third-party app store. As long as thereâs demand for financial freedom, people will find ways around the ban. The ban has made crypto more secretive, not less popular.
Whatâs the difference between the digital yuan and Bitcoin?
The digital yuan is controlled entirely by the Peopleâs Bank of China. Every transaction is tracked. The government knows who paid whom, how much, and when. Bitcoin and other cryptos are decentralized. No one owns them. No one tracks them unless you leak your wallet address. The digital yuan is a payment tool. Crypto is a financial tool - for savings, remittances, and escaping control.
Is crypto adoption growing or shrinking in China?
Itâs growing. Despite crackdowns, the number of Chinese crypto users rose to 59 million in 2025 - up from 52 million in 2023. Stablecoin usage jumped 78% in one year. More young people are using crypto for real-life needs. Even with account freezes and scams, 82% of users say theyâre trading more, not less. The ban hasnât stopped adoption. Itâs just made it harder - and more sophisticated.
Bro this is wild. People are literally building their own financial system because the government won't let them have one. I mean, who needs banks when you can send USDT in 15 minutes? đ
The fact that 63% of crypto trades in China happen via P2P through WeChat is insane. Itâs not just evasion-itâs innovation. People created a decentralized finance network without any tech companyâs permission. Thatâs real resilience.
Wait wait wait⌠so the Chinese government is banning crypto but building blockchain for state-controlled trade finance? Classic. They want the power of the tech without the freedom. Theyâre not afraid of crypto-theyâre afraid of people having control. This is just digital authoritarianism with a fancy name
The structural arbitrage here is fascinating-the regulatory impedance mismatch between capital controls and decentralized settlement layers is creating a latent liquidity channel that outperforms SWIFT in efficiency and cost. USDT is effectively a private monetary protocol operating beneath the stateâs surveillance lattice.
Oh wow another âcrypto freedomâ fairy tale. Chinaâs just letting people do whatever they want? Sure. Next youâll say the DMV is chill with people skipping lines. The governmentâs crushing these people daily-freezing accounts, jail time, you name it. Stop romanticizing oppression.
Theyâre all being watched. Every single transaction. Every VPN. Every WeChat group. The government lets this happen so they can track whoâs rich, whoâs rebellious, whoâs got foreign ties. This isnât freedom-itâs a honeypot. Theyâre collecting data on 59 million people and calling it âtoleranceâ.
Imagine being told you canât move your own money⌠then just doing it anyway. Thatâs not rebellion. Thatâs basic human instinct. Chinaâs ban didnât kill crypto-it turned it into a silent revolution. And honestly? I respect the hell out of that.
USDT for remittances? Duh. Banks are dinosaurs. Why pay $200 to send $5K overseas when you can do it for $20 in 10 minutes? The system is broken and people fixed it themselves. No thanks to the state
the digital yuan is like a loyalty card that knows everything you buy⌠and crypto is the cash you keep in your sock. oneâs convenient, the otherâs free. i get why people pick the sock.
89% male users? Yeah that tracks. Cryptoâs still a bro zone. But honestly? The real story isnât gender-itâs that young Chinese people are smarter than their government thinks. Theyâre not breaking rules. Theyâre rewriting the game.
the whole thing is a paradox. the state wants to control money so bad they built their own digital currency⌠but the people want to escape control so bad they built their own underground economy. one side has the law, the other has the will. and right now? the will is winning. quietly. no fanfare. just transfers.
you think this is underground? nah. this is the future. the state is just pretending to be in charge. meanwhile, 59 million people are running a parallel economy using apps downloaded from sketchy android stores. the real power isnât in Beijing-itâs in the hands of a 28-year-old in Chengdu who just sent USDT to his sister in London. and you canât stop that.
so china banned crypto⌠then everyone just used wechat to become bankers? classic. next theyâll ban air and people will start breathing through straws.
This is not merely an act of defiance-it is a profound reclamation of economic agency by a generation that refuses to be confined by archaic paradigms. The resilience displayed through peer-to-peer mechanisms and stablecoin utility represents a paradigm shift in financial sovereignty, particularly in contexts where institutional trust has been systematically eroded.
People donât need permission to use money. Thatâs the whole point.
I canât stop thinking about how these young people are building something beautiful out of oppression. Theyâre not just trading crypto-theyâre building trust networks, creating new rules, and proving that human ingenuity canât be legislated away. This isnât just finance. Itâs hope in action.
Itâs fascinating how the digital yuanâs transparency makes it feel like surveillance, while cryptoâs anonymity feels like liberation-even if itâs not always safe. People arenât choosing crypto because itâs perfect. Theyâre choosing it because the alternative feels worse.
the real win isnât the 59 million users-itâs that the government canât even pretend theyâve won. theyâve got all the power, but zero control. and thatâs gotta sting.