China's crypto liquidation plans are part of a broader grand strategy to centralize financial control, eliminate decentralized cryptocurrencies, and promote its own state-backed digital currency, the digital yuan (CBDC).
As of June 1, 2025, China implemented a comprehensive ban on all crypto activities, including buying/selling, mining, and private ownership of cryptocurrencies such as Bitcoin and Ethereum.
This ban aims to mitigate financial risks, crack down on illegal activities linked to crypto, and reduce energy consumption associated with mining. By outlawing private crypto ownership, China reinforces its grip on national financial flows and accelerates the adoption of the digital yuan, strengthening its financial hegemony domestically and potentially globally.
Additionally, the Chinese government is considering strategic responses to stablecoins and digital assets, including legislation like the Stablecoin Ordinance (effective August 2025), which requires dedicated licensing. This shows a controlled approach to digital currencies strictly within regulatory frameworks that exclude decentralized assets.
Thus, China's grand strategy encompasses:
A total ban on private crypto buying/selling, mining, and ownership to eliminate decentralized financial risks.
Promotion and accelerated adoption of the centralized digital yuan CBDC.
Tightened monitoring, reporting, and controls on suspicious crypto-related transactions via banks.
Regulatory steps toward formal licensing around stablecoins and digital assets under government oversight.
Ultimately, this strategy aims to reassert China's financial control, reduce illicit financial flows, and establish dominance in the future digital currency infrastructure under state authority.
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