Strengthen silver-tax interaction! China encourages banks to use blockchain, but people trading coins and doing tokenization are all breaking the law

Chinese authorities encourage banks to adopt blockchain to strengthen “tax-credit interaction” to help business financing, but at the same time they comprehensively ban private cryptocurrency trading and mining, and classify stablecoins and tokenization as illegal. They clearly draw a line between official technical applications and private speculation.

China encourages institutions to adopt blockchain to deepen the tax-credit interaction model

China’s State Taxation Administration and the National Financial Regulatory Administration have recently jointly issued the 《Notice on Further Deepening and Regulating the Work of “Tax-Credit Interaction”》， mainly targeting tax bureaus in various provinces and cities and major banks. The goal is to improve the lending environment for private and small and micro enterprises.

The authorities encourage local tax authorities and banks, in accordance with the law, to use blockchain and privacy computing technologies to innovate tax-credit interaction models. The authorities require banks and taxpayers to achieve standardized data sharing, eliminating information asymmetry among the three parties of tax, credit, and the enterprises.

The authorities also require banks to improve credit models, enhance review efficiency, expand financing supply for honest taxpayers, and explicitly require the implementation of 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 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 do not have the status of legal tender and that trading and mining activities are comprehensively prohibited within China.

The authorities also, for the first time, set Real World Assets (RWA) tokenization and stablecoin-related practices 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, declared that crimes of money laundering involving cryptocurrencies will be severely punished. At the same time, BitChat, an end-to-end privacy communications application launched by Jack Dorsey, the founder of Twitter and CEO of Block, has also been removed from China’s Apple app store.

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

China is separating blockchain infrastructure from private cryptocurrency speculation

While banning people’s cryptocurrency activities, China 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-credit interaction technology shows that China views data as a core production factor, and it hopes to use blockchain’s tamper-resistant characteristics to address the financing difficulties faced by the real economy.

But for private cryptocurrency and tokenized assets, the official stance is extremely firm, and the authorities are 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-world financial operations, while firmly blocking any private cryptocurrency trading and token issuance activities that could threaten financial order.