Social media buzzed with claims on August 2 that China banned cryptocurrency ownership, briefly sending Bitcoin below $113,000. These unconfirmed reports come as China continues to expand its government-backed digital yuan.
Several accounts, including @Rawsalerts, shared posts claiming China “officially banned cryptocurrency trading, mining, and related services.” The market reacted quickly but cautiously, with Bitcoin dropping from $113,700 to $112,200 before recovering within hours.
Industry experts quickly questioned the reports. Social commentator Andrew Hart called out the claims on X: “No, China didn’t just ban crypto again. But the rumor shook the markets briefly.” Hart noted this pattern has repeated for years, with similar rumors typically surfacing during bull markets.
No official announcement has come from Chinese regulators. The People’s Bank of China hasn’t issued any new policies about cryptocurrency ownership, leading fact-checkers to dismiss the claims as recycled news from previous restrictions.
China’s existing crypto policy dates to 2021, when authorities banned trading and mining. That earlier crackdown forced miners to relocate to countries like the United States and Kazakhstan, dramatically shifting the global mining landscape.
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Meanwhile, China’s digital yuan program continues gaining momentum. The e-CNY now operates in 29 cities with approximately 260 million users. By mid-2024, it had processed around $7.3 trillion in transactions and expanded into international trade, including oil purchases.
Unlike Bitcoin, the digital yuan operates under central government control. It uses a two-tier system where the central bank issues the currency and commercial banks distribute it to users. This gives Chinese authorities visibility and control that physical cash doesn’t provide.
For China, restricting private cryptocurrencies while promoting the digital yuan serves multiple goals. It centralizes financial oversight, improves payment systems, and potentially challenges the US dollar in global trade. The digital yuan also gives authorities better tools to monitor transactions and implement monetary policy.
The relationship between crypto bans and digital yuan growth highlights China’s approach to financial technology – embracing innovation while maintaining strict control. By limiting decentralized currencies, China creates space for its state-backed alternative to grow.
For crypto markets, these periodic “China ban” rumors have become a familiar cycle. Veteran traders often see these dips as temporary, with prices typically recovering once the claims are investigated.
As other central banks develop their own digital currencies, China maintains its significant head start. Whether the latest rumors prove true or not, China appears committed to advancing its digital yuan while restricting alternatives that operate outside government control.
