Crypto Adoption in China Despite Ban: How 59 Million Still Trade Underground in 2025

China banned cryptocurrency - but millions are still trading it

China officially outlawed all cryptocurrency activity in 2021. Trading, mining, even holding Bitcoin became illegal. Banks were ordered to block crypto-related transactions. Exchanges like Binance were forced out. The government pushed its own digital currency, the e-CNY, as the only acceptable form of digital money. Yet by 2025, 59 million Chinese citizens are still actively using crypto. That’s more than the entire population of Canada. And it’s the second-largest crypto user base in the world.

How is this possible? The answer isn’t magic. It’s persistence, ingenuity, and necessity.

They’re not using exchanges - they’re using WeChat

Chinese users don’t log into Binance or Coinbase anymore. Those platforms are blocked. Instead, they use apps that never left their phones: WeChat and QQ.

Groups of buyers and sellers meet in private chat rooms. They trade Bitcoin, Ethereum, and especially USDT (Tether) - a stablecoin pegged to the U.S. dollar. No central platform holds the money. One person sends cash to the other’s bank account. The other sends crypto to a wallet address. To avoid scams, they use escrow services built into the chat. One side releases crypto only after the bank transfer shows up. It’s risky, but it works.

According to a June 2025 analysis, 63% of all crypto transactions in China happen this way. Nearly half of those trades - 45% - are done through WeChat groups alone. These aren’t hobbyists. These are people sending money to family overseas, buying goods from foreign sellers, or protecting savings from inflation.

VPNs, encrypted wallets, and hidden apps

Accessing offshore crypto exchanges requires bypassing China’s Great Firewall. That’s where VPNs come in. A 2024 Chainalysis report found that 78% of Chinese crypto users rely on virtual private networks to reach platforms like Bybit and OKX. They pay $3-$10 a month for apps that hide their traffic from government monitors.

Some go further. They use privacy coins like Monero (XMR), which are designed to hide transaction details. Others turn to decentralized finance (DeFi) apps - lending, borrowing, earning interest - accessed through browser extensions that don’t show up on official app stores.

Developers inside China have even built custom apps like “CryptoBridge” and “Silk Road Wallet.” These apps use domain fronting - hiding their real servers behind legitimate-looking websites - to slip past censorship. By mid-2025, these apps had been downloaded over 8.7 million times from third-party Android stores. No Apple App Store. No Google Play. Just word-of-mouth, Telegram links, and QR codes shared in private chats.

The digital yuan is everywhere - but no one trusts it

The Chinese government isn’t blind to crypto’s popularity. It’s fighting back - with its own currency.

The e-CNY, or digital yuan, is now in use by 260 million individuals and 15.5 million businesses. It’s accepted at train stations, grocery stores, and even for paying civil servants’ salaries in pilot cities. The government claims it’s faster, cheaper, and more secure than cash or bank transfers.

But here’s the catch: the e-CNY is fully traceable. Every transaction is logged. The state can see who you paid, when, and how much. For many Chinese, especially those worried about capital controls or political surveillance, that’s a dealbreaker.

That’s why crypto still thrives. Bitcoin and USDT offer anonymity. You can’t freeze someone’s Bitcoin wallet like you can freeze a digital yuan account. You can’t track who owns a wallet unless they give you the private key. For people trying to move money out of China - or just protect their savings - that’s priceless.

Young, tech-savvy, and willing to take risks

Who’s using crypto in China? Not retirees. Not farmers. Not small-town shopkeepers.

It’s mostly young people. 37.5% of crypto users are between 25 and 34 years old - much higher than the global average. Only 12.8% are over 45. And it’s overwhelmingly male: 89.2% of users are men, compared to 86.9% globally.

They’re urban, educated, and connected. Many work in tech, finance, or international trade. They’ve seen how money moves elsewhere - fast, borderless, uncensored. They don’t want to wait three days for a bank transfer to Australia. They don’t want to pay 10% in fees to send money home. They want to click a button and have it done in 15 minutes.

One user on a WeChat crypto forum wrote: “Using USDT to send money to my daughter in Australia saves me 87% in fees. Takes 15 minutes, not 3 days.” That’s the real driver - not speculation. It’s survival.

The cost of breaking the rules

It’s not risk-free. In fact, it’s dangerous.

Since 2021, Chinese authorities have frozen over 1,287 bank accounts linked to crypto activity and fined individuals and businesses over 237 million CNY ($32.6 million). In the first quarter of 2025 alone, the government reported 1.2 billion CNY ($165 million) in crypto-related fraud losses.

Scams are rampant. Fake trading bots. Fake wallets. Fake “guaranteed returns” on Telegram. Many users lose everything. A Reddit survey from April 2025 found that 68% of Chinese crypto users had their accounts frozen at least once. The average loss? 23,500 CNY ($3,250).

Yet 82% of those users kept trading. Nearly half increased their investment in 2025.

Why? Because the alternatives are worse. Traditional banks limit how much money you can take out of China. The yuan has lost value against the dollar. Inflation is rising. And for many, crypto isn’t just an investment - it’s a lifeline.

Is China going to change its mind?

The government says no. In April 2025, PBoC Governor Pan Gongsheng declared that private crypto activity “violates China’s Anti-Money Laundering Law” and can lead to criminal prosecution.

But behind closed doors, things are shifting.

In July 2025, the Shanghai State-Owned Assets Supervision and Administration Commission quietly noted in meeting minutes that “the rapid evolution of digital assets necessitates more nuanced regulatory approaches.” That’s official-speak for: “We know this isn’t working.”

Meanwhile, Hong Kong - technically part of China but operating under different rules - has become a crypto hub. Seven exchanges are now licensed there. In April 2025, they handled $14.3 billion in monthly trading volume. Many mainland users access these platforms through Hong Kong-based accounts.

Even banks are experimenting. In June 2025, 14 major Chinese banks launched a blockchain pilot in the Shanghai Free Trade Zone for cross-border trade finance. They’re not using Bitcoin. They’re using private blockchain tech - the same underlying system that powers crypto.

Analysts at Bernstein predict a 65% chance China will adopt a “controlled access” model by 2027 - like India’s 30% tax on crypto gains. Not a full ban. Not full freedom. But a middle ground: tax it, regulate it, monitor it - but let it exist.

Why this matters to the world

China’s crypto paradox isn’t just a local story. It’s a global case study in how governments lose control of money.

When you ban something that people need - whether it’s food, medicine, or financial freedom - you don’t stop the behavior. You just make it harder, riskier, and more underground.

China tried to crush crypto. It didn’t work. Instead, it forced users to become smarter. More cautious. More technical. More resilient.

The digital yuan may be the future of state-controlled money. But private crypto? That’s the future of personal freedom - even in the most tightly controlled economy on Earth.