China bans crypto trading and mining
Regulators send Bitcoin downhill with drastic decision
Justin Wong (JW)October 5, 2026
China's most powerful regulators on Friday tightened their crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining that hits Bitcoin and other vital coins and puts pressure on crypto and blockchain stocks.
Ten agencies, including the central bank, finance, securities and foreign exchange regulators, vowed to work together to eradicate "illegal" cryptocurrency activity. This is the first time Beijing-based regulators have joined forces to expressly ban all activities related to cryptocurrencies.
China banned financial institutions and payment companies from providing services related to cryptocurrency transactions in May, and passed similar bans in 2013 and 2017.
The repeated bans underscore the challenge of closing loopholes and identifying Bitcoin-related transactions, despite banks and payment companies saying they support the effort.
Friday's statement is the most detailed and far-reaching of the country's key regulators yet, underscoring Beijing's commitment to stifling the Chinese crypto market.
"In the history of crypto market regulation in China, this is the most direct and comprehensive regulatory framework that most government departments are involved in," said Winston Ma, associate professor at NYU Law School.
The move comes amid a global crackdown on cryptocurrencies as governments from Asia to the United States fear that privately operated, highly volatile digital currencies could undermine their control of the financial and monetary system, increase systemic risk, encourage financial crime and harm investors.
They also fear that "mining," the energy-intensive computing process by which Bitcoin and other tokens are created, is harming global environmental goals.
Chinese government agencies have repeatedly raised concerns that speculation in cryptocurrencies could disrupt the country's economic and financial order, a top priority for Beijing.
Analysts say China also sees cryptocurrencies as a threat to its sovereign digital yuan, which is in an advanced pilot stage.
"Beijing is so hostile to economic freedom that it cannot even allow its people to participate in what is arguably the most exciting financial innovation in decades," tweeted leading Republican Senator Pat Toomey.
While U.S. regulators are scrutinizing the risks of digital assets, they have stated that they also present opportunities, including promoting financial inclusion.
The People's Bank of China (PBOC) said cryptocurrencies are banned from circulating and foreign exchanges are banned from offering services to China-based investors. It also banned financial institutions, payment companies, and internet firms from facilitating domestic cryptocurrency trading.
The government will "take decisive action against speculation with virtual currencies in order to protect people's property and maintain economic, financial and social order," according to the PBOC.
China's National Development and Reform Commission said it would work to cut off funding and power supplies for mining, which it believes is risky and hampers carbon neutrality goals.
Bitcoin, the world's largest cryptocurrency, fell more than 9% before it could make up for those losses. It was 6.6% lower at $ 41,937 around 12:00 PM ET. Smaller coins, usually mimicking the bitcoin, also fell.
China's cabinet promised in May to crack down on Bitcoin mining and trading in order to mitigate financial risks without going into detail. Friday's news dashed hopes among crypto enthusiasts that the cabinet would fail to act on its threat.
"This is the manifestation of the announcement of crypto mining and trading ... in May," said NYU's Ma.
BOUNCE BACK?
The move also hit cryptocurrency and blockchain-related stocks, though they caught back some of those declines in morning US trading.
The US-listed miners Riot Blockchain (NASDAQ: RIOT), Marathon Digital and Bit Digital lost between 2.5% and 5%, while the crypto exchange Coinbase (NASDAQ: COIN) Global from San Francisco lost just over 1%.
Despite the initial shock, analysts said they don't expect the crackdown to hurt global crypto asset prices in the long term as companies continue to adopt crypto products and services.
How badly the major crypto exchanges and payment companies are affected, however, was not immediately clear. Binance, the world's largest exchange, has been blocked in China since 2017, a spokesman said. A Coinbase spokesman declined to comment. Global payments company PayPal (NASDAQ: PYPL) doesn't offer crypto services in China, a spokesman said.
The OKEx and Huobi crypto exchanges, originally from China but now based overseas, are likely to be the hardest hit as they still have some Chinese users, according to analysts. Tokens connected to the two exchanges crashed more than 20%. The exchanges did not immediately respond to requests for comment.
However, the Chinese government has made efforts in the past to prevent internet users from evading their controls.
"China's actions haven't slowed the rise of cryptocurrencies too much in the past, so I wouldn't be surprised if they bounced back," wrote Craig Erlam, an analyst at currency broker OANDA.
Virtual currency mining was big business in China before May, accounting for more than half of the world's crypto supply, but miners have moved overseas.
"The losers in all of this are clearly the Chinese," said Christopher Bendiksen, head of research at digital wealth manager CoinShares. "You will now lose about $ 6 billion worth of annual mining revenues, all of which will flow into the remaining global mining regions," he added, citing Kazakhstan, Russia and the United States.
