How China Turned Its Crypto Ban into a National Breakthrough
Franc Smidt, Editor-in-Chief, FUTURUM
While the world debates miners’ rights, token custody freedoms, and the ethical nature of digital assets, China is waging a quiet engineering offensive. Paradoxically, in July 2025, the very country where holding Bitcoin can now result in criminal charges has simultaneously launched the largest blockchain cluster in history, capable of handling a quarter-billion smart contracts per second. The ban became a foundation. The contradiction became the architecture.
This is not a rejection of the technology — it’s an attempt to rebuild it on China’s terms, with its own sovereignty and philosophy. Beijing isn’t dismantling blockchain — it’s dismantling the West from blockchain.
Red Line for Crypto, Green Light for Blockchain
On May 30, 2025, Chinese authorities officially concluded their long-running purge of the crypto sector. Now, not only trading and mining are banned — but even private token ownership, including Bitcoin and stablecoins, is a criminal offense.
At the same time, state media showcased the rollout of Digital Yuan 2.0 — no longer just a token, but a multi-layered national platform with real-time support, integrated with judicial systems, tax authorities, and healthcare services.
This was no surprise. Since 2021, blockchain has been part of China’s five-year plan — but in a tightly controlled form: no public tokens, no DAOs, no decentralization. Beijing has poured billions into research funds, distributed infrastructure grants, and even integrated blockchain into its prison systems. According to Deloitte, over $6 billion was allocated for domestic blockchain development between 2019 and 2024 — a figure that’s likely just the tip of the iceberg.
In 2024, China filed 84% of all global blockchain patent applications, though only one in five was approved. For Beijing, success isn’t measured by adoption rates, but by controllability and alignment with national digital priorities.
The State as Lead Client: Digital IDs, Smart Prisons, and Trillions of Contracts
While the U.S. explores blockchain in DeFi and metaverse applications, China is using it to build governance infrastructure.
A flagship example is RealDID, a unified citizen verification system first deployed in Shanghai and now covering over 200 million people. Every action in healthcare, transportation, or education leaves a trace on the state blockchain — not just a digital signature, but a permanent legal record.
In February 2025, China launched a computing cluster capable of 240 million smart contracts per second — tens of thousands of times faster than Ethereum or Solana. The cluster is used to tokenize government bonds, manage export contracts with Russia and Iran, and verify Alibaba, JD.com, and Huawei supply chains under the Belt and Road initiative.
Even the prison system is on-chain: in Guangdong, blockchain tracks inmate movement and prison supplies; in Shenzhen, court decisions and legal evidence are stored in decentralized registries. According to the Supreme People’s Court, this has reduced average case durations by 18%.
The Private Sector: Who Survived the Crypto Exorcism
Despite heavy regulation, Chinese corporations continue to build blockchain — but strictly within limits. The Yuan is the only permissible asset. The People’s Bank of China monitors not only system architecture, but also business models.
| Company | Direction | Application in 2025 |
| Alibaba (AntChain) | Anti-counterfeiting | 1.5 billion products are tracked on blockchain via QR codes; fully integrated with Cainiao Logistics. |
| JD.com | Environmental certification | Carbon footprint certificates for each parcel; recorded in BSN. |
| Tencent | NFT without tokens | NFT collections appeared in WeChat, linked to ID and digital yuan. |
| Bank of Communications | Asset tokenization | Mortgage portfolios worth 9.3 billion yuan transferred to the Jucai Chain blockchain platform. |
Innovation isn’t banned — it’s filtered. The red line is sovereignty: no Ether, no stablecoins, only state-aligned value.
Regulation: Whitelists and Kill Switches
China’s blockchain regulation isn’t law — it’s infrastructure of permission. There are two access tiers: a negative list, where anything crypto-related is forbidden; and a positive list, consisting of pilot zones where blockchain firms receive tax breaks and direct funding from China Development Bank.
Since 2024, the National Blockchain Vulnerability Database has been in place — a CVE equivalent, but with mandatory security certification required to access public contracts. This gives Beijing total control over the tech stack — no reliance on GitHub, IPFS, or Western SDKs.
What’s Next: “Vision 2035” and Tokenless Expansion
In China, blockchain is not just a technology — it’s a language of power. In the official “Vision 2035” strategy, blockchain sits alongside 5G, satellite swarms, and AI as the foundation of a new infrastructure era.
Planned objectives include:
– Migrating 40% of public services to blockchain by 2027 (currently 140 in 2025)
– Expanding the global BSN network with hubs in Shanghai and Dubai
– Cutting blockchain chip import dependence to 0% (currently at 34%)
China is not exporting technology — it’s exporting a model. Brazil is rolling out blockchain-based voting. India is replicating RealDID. Even Gulf countries are shifting from crypto to Sharia-compliant ledgers based on BSN.
Who Gets the Final Say?
The world sees blockchain as a symbol of freedom. China has turned it into a symbol of control. There’s no contradiction here — only strategy. In digital geopolitics, it’s not the loudest decentralizer who wins — it’s the one who builds infrastructure first. While others debate Web3’s future, Beijing is already registering it — with no delete button.
