Polymarket traders are assigning low odds to China legalizing onshore Bitcoin purchases by the end of 2026, but Beijing’s regulatory trajectory points firmly in the opposite direction.

In February 2026, Chinese regulators formalized a strengthened “Ban 2.0” framework, explicitly classifying virtual-currency business activities as illegal financial activity and expanding enforcement to cover marketing, payment clearing, traffic facilitation, and stablecoins. The new rules also introduce civil penalties that render crypto-related transactions legally invalid, reinforcing deterrence at both the institutional and individual levels.

While Hong Kong continues to function as a controlled testing ground—hosting spot crypto ETFs, developing a stablecoin licensing regime, and piloting tokenization initiatives—these offshore experiments do not signal liberalization in mainland China. Instead, they act as a regulatory pressure valve, allowing tightly supervised innovation without permitting renminbi-to-Bitcoin conversions within the mainland.

At the same time, Beijing is actively supporting tokenization of real-world assets under strict oversight, highlighting a clear distinction: state-supervised digital finance is acceptable; decentralized crypto trading is not.

Although Bitcoin mining activity in China has partially rebounded despite the ban, this reflects enforcement gaps rather than a policy shift. The overall direction since late 2025 has been toward tighter controls, clearer prohibitions, and stronger legal codification.

In essence, the real question is not whether China will become “crypto-friendly,” but whether it will reverse a newly reinforced legal framework and allow citizens to convert renminbi into Bitcoin domestically. Given current signals, such a reversal appears highly unlikely without a major political or economic catalyst.