Beyond Borders: The Surprising Surge of Cryptocurrency in China's Economic Downturn


Residents of China have found inventive ways to navigate the ban on cryptocurrencies, particularly Bitcoin (BTC), as they actively convert their savings into digital assets. Despite the ban on cryptocurrency in mainland China and strict capital controls, individuals are leveraging crypto exchanges like OKX and Binance or exploring over-the-counter channels to trade Bitcoin. Moreover, mainland China investors are opening overseas bank accounts to engage in the acquisition of crypto assets.

This surge in crypto activity is attributed to the economic downturn in China, which has rendered investing on the mainland more precarious and less appealing. As a result, people are turning to offshore options to safeguard and grow their assets.

“Almost every day, mainland investors come into this market.”

Anonymous senior executive at a Hong Kong crypto exchange

The senior executive, wishing to remain anonymous, highlighted the risks and uncertainties associated with investing in China, pushing many to explore alternatives. Hong Kong, with its open approval of digital assets, has become a hotspot for Chinese citizens looking to utilize their annual $50,000 currency purchase quota to transfer funds into cryptocurrency accounts in the territory.

The Changing Landscape Post-2017 Ban

In 2017, China closed its local cryptocurrency exchanges, dealing a severe blow to the speculative market that once accounted for 90% of global bitcoin trading. Then, in September 2021, the Chinese government implemented a complete ban on all cryptocurrency transactions. Despite these stringent measures, residents of mainland China persisted as active crypto users.

Chainalysis experts argue that China's engagement with the Hong Kong market serves as a “testing ground for rapprochement with cryptocurrencies.” This strategic approach allows mainland residents to maintain their interest in cryptocurrencies while navigating the restrictions imposed by the Chinese government.

Hong Kong’s Crypto Transaction Surge

From July 2022 to June 2023, Hong Kong emerged as a significant player in the global cryptocurrency market, securing the fifth position in terms of transaction volume, boasting an impressive $64 billion. This placed Hong Kong just behind major players like South Korea, Japan, China, and Taiwan. Analysts pointed out that Hong Kong's transaction indicators were comparable to those of China, despite the administrative region's population being only 0.5% of mainland China.

One noteworthy aspect is the substantial contribution from large institutional transactions, often exceeding $10 million. This influx of institutional capital suggests growing confidence in the cryptocurrency market, even amid regulatory uncertainties and the economic challenges faced by mainland China.

Challenges and Opportunities

The ban on cryptocurrency in mainland China poses challenges for individual investors seeking direct access to the market. However, the resourcefulness of Chinese citizens in utilizing overseas channels, especially in Hong Kong, showcases the resilience of the crypto community.

While the Chinese government remains steadfast in its regulatory stance, the increasing crypto transactions in Hong Kong raise questions about the effectiveness of such bans. Critics argue that the ban has not curbed interest but has merely redirected it towards offshore platforms, potentially limiting the government's ability to monitor and regulate these transactions.


The current economic downturn in China has triggered a notable shift in investment strategies, with many residents turning to cryptocurrencies as a means to safeguard their assets. Despite the ban, the crypto community in mainland China remains active, leveraging creative solutions to access digital assets.

Hong Kong, with its more crypto-friendly environment, has become a crucial hub for Chinese investors looking to navigate the regulatory landscape. The surge in cryptocurrency transactions in Hong Kong, despite its smaller population compared to mainland China, underscores the resilience and adaptability of the crypto market in the face of regulatory challenges.

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