Strengthen the interaction between banks and tax authorities! China encourages banks to use blockchain, but everyone who speculates in cryptocurrencies or tries to tokenize things is committing crimes.

Chinese authorities encourage banks to adopt blockchain to strengthen “tax-revenue and tax-payment interaction” in order to help corporate financing, but at the same time comprehensively prohibit private cryptocurrency trading and mining, and classify stablecoins and tokenization as illegal, clearly separating official technical applications from private speculation and hype.

China encourages institutions to adopt blockchain and deepens the tax-revenue and tax-payment interaction model

The State Taxation Administration and the National Financial Regulatory Administration jointly released a notice titled “Notice on Further Deepening and Regulating ‘Tax-Revenue and Tax-Payment Interaction’ Work” to be implemented recently. It mainly targets tax bureaus in various provinces and cities and major banks, with the goal of improving the lending environment for private enterprises and small and micro businesses.

Local tax authorities and banks are encouraged to, in accordance with the law, use blockchain and privacy computing technologies to innovate the tax-revenue and tax-payment interaction model. The authorities require banks and taxpayers to implement standardized data-sharing, eliminating information asymmetry among the three parties of tax administration, tax banks, and enterprises.

The authorities also require banks to improve credit models, enhance review efficiency, expand financing supply for enterprises that pay taxes honestly, and explicitly require implementation of data security and enterprise authorization management.

Blockchain technology enables tax authorities and financial institutions to share data in a tamper-resistant environment, reducing paperwork and further accelerating the processes for risk assessment and financing approvals.

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

Before rolling out blockchain applications, the Chinese government has already banned people from engaging in cryptocurrency activities. In early 2026, eight departments including the People’s Bank of China issued a notice reiterating that cryptocurrencies have no legal tender status and that all trading and mining activities within the country are comprehensively prohibited.

The authorities also, for the first time, classified real-world asset (RWA) tokenization and stablecoins as illegal financial activities. If RWA tokenization is carried out within China or intermediary services are provided, it will be suspected of illegal fundraising.

Zhang Jun, President of the Supreme People’s Court of China, declared that crimes involving money laundering with cryptocurrencies will be severely punished. Meanwhile, BitChat, an end-to-end privacy communication app launched by Jack Dorsey, the founder of Twitter and CEO of Block, has also already been taken down from China’s Apple App Store.

• **Related report:**China shuts down RWA innovation! Stablecoins, tokenization, and mining are all labeled as “illegal finance.”

China is severing blockchain infrastructure from private cryptocurrency speculation

While banning people from cryptocurrency activities, China nevertheless encourages small and micro enterprises to adopt blockchain technology. This shows that the Chinese government has a clear policy boundary.

This push to upgrade the tax-revenue and tax-payment interaction technology indicates that China treats data as a core productive factor, a national strategic priority, and hopes to use blockchain’s tamper-resistant attributes to address the difficulties in financing for the real economy.

But regarding private cryptocurrencies and tokenized assets, the official stance is extremely strict, and it is actively preventing speculation 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-economy financial operations, while firmly blocking any private cryptocurrency trading and token issuance activities that could threaten the financial order.