Strengthen the bank-tax interaction! China encourages banks to use blockchain, but ordinary people trading coins and engaging in tokenization are all illegal.

China’s official guidance encourages banks to adopt blockchain to strengthen “tax-revenue and tax-to-loan interaction” to help corporate financing, but at the same time it comprehensively bans private cryptocurrency trading and mining, and classifies stablecoins and tokenization as illegal—clearly separating official technical applications from private speculation and hype.

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

The State Taxation Administration and the National Financial Regulatory Administration have recently jointly issued the “Notice on Further Deepening and Regulating ‘Tax-Revenue and Tax-to-Loan Interaction’ Work,” mainly targeting provincial and municipal tax bureaus and major banks, with the goal of improving the lending environment for private-sector and small and micro enterprises.

The authorities encourage local tax authorities and banks to lawfully use blockchain and privacy computing technologies to innovate tax-revenue and tax-to-loan interaction models. The authorities require banks and taxpayers to achieve standardized data-sharing, eliminating information asymmetry among the three parties—tax authorities, banks, and enterprises.

The authorities also require banks to improve credit models, enhance review efficiency, expand financing supply for honest taxpayers, and clearly require the implementation of data security and corporate authorization management.

Blockchain technology enables tax authorities and financial institutions to share data in a tamper-resistant environment, reduce paper-based work, and further speed up the processes of 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-related activities. In early 2026, eight departments including the People’s Bank of China issued a notice reaffirming that cryptocurrencies have no legal-tender status and that trading and mining activities are comprehensively prohibited within China.

The authorities also, for the first time, set the tone that the tokenization of real-world assets (RWA) and stablecoins constitute 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, declared that crimes involving cryptocurrency money laundering will be severely punished. At the same time, BitChat—a BitChat end-to-end privacy communications application launched by Block’s CEO Jack Dorsey (Jack Dorsey, who founded Twitter)—has also been removed from China’s Apple App Store.

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

China is cutting ties with blockchain infrastructure and private cryptocurrency speculation

While prohibiting people from engaging in cryptocurrency activities, it is encouraging small and medium-sized enterprises to adopt blockchain technology—revealing a clear policy boundary for the Chinese government.

This time, the push to upgrade tax-revenue and tax-to-loan interaction technology shows that China regards data as a core production factor and hopes to use blockchain’s tamper-resistant characteristics to address the financing difficulties faced by the real economy.

But toward private cryptocurrencies and tokenized assets, the official stance is extremely tough, and it is actively preventing the speculative hype and operational risks brought by tokenization.

Overall, the Chinese government’s position 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 potentially endanger financial order.