Strengthen the bank–tax interaction! China encourages banks to use blockchain, but people trading coins and tokenizing everything is all illegal.

The Chinese government encourages banks to adopt blockchain to strengthen “tax-and-loan interactions” to help companies obtain financing, but at the same time it fully bans private cryptocurrency trading and mining, and lists stablecoins and tokenization as illegal, clearly separating official technological applications from private speculation and hype.

China encourages institutions to adopt blockchain to deepen tax-and-loan interaction models

The National Administration of Taxation and the National Financial Regulatory Administration recently jointly issued the “Notice on Further Deepening and Regulating ‘Tax-and-Loan Interaction’ Work,” which mainly targets tax authorities in provinces and cities and major banks. The goal is to improve the lending environment for private enterprises and small and micro enterprises.

The authorities encourage local tax authorities and banks to依法 use blockchain and privacy computing technology to innovate tax-and-loan interaction models. The officials require banks and taxpayers to implement standardized data-sharing, eliminating information asymmetry among the tax, bank, and enterprise parties.

The authorities also require banks to improve credit models, enhance review efficiency, expand financing supply for honest taxpayers, and explicitly require落实 data security and enterprise authorization management.

Blockchain technology enables tax authorities and financial institutions to share data in a tamper-resistant environment, reduces paper-based work, and further speeds up risk assessment and financing approval processes.

China cracks down on cryptocurrency, mining, stablecoins, and tokenization

Before promoting blockchain applications, the Chinese government had already prohibited people from engaging in cryptocurrency-related activities. In early 2026, eight departments including the People’s Bank of China issued a notice reiterating that cryptocurrencies do not have legal tender status, and that cryptocurrency trading and mining are comprehensively banned within China.

The authorities have also, for the first time, defined tokenization of real-world assets (RWA) and stablecoin-related activities as illegal financial activities. If RWA tokenization is carried out within China or intermediary services are provided, it is suspected of illegal fundraising.

Zhang Jun, president of the Supreme People’s Court of China, announced that the government will severely punish cryptocurrency-related money-laundering crimes. Meanwhile, BitChat, an end-to-end privacy communications app launched by Jack Dorsey (Jack Dorsey), the founder of Twitter and CEO of Block, has also already been removed from China’s Apple App Store.

• **Related coverage:**China bans RWA innovation! Stablecoins, tokenization, and mining are all labeled as “illegal finance”

China is severing ties with blockchain infrastructure and private crypto speculation

While banning people’s cryptocurrency activities, it simultaneously encourages small and medium-sized enterprises to adopt blockchain technology. In doing so, the Chinese government has signaled a clear policy boundary.

This push to upgrade tax-and-loan interaction technology shows that China views data as a core production factor national strategy. It hopes to use blockchain’s tamper-resistant features to address the financing difficulties faced by the real economy.

But toward private cryptocurrencies and tokenized assets, the official stance is extremely firm, and it is also strictly preventing speculative hype and operational risks brought about by tokenization.

Overall, the position of the Chinese government is to bring the underlying blockchain technology under official regulatory applications, thereby improving the efficiency of real-sector financial operations while resolutely blocking any private cryptocurrency trading and token issuance activities that could endanger financial order.