In a groundbreaking development signaling potential regulatory thaw toward cryptocurrency in China, four major state-owned banks—Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Bank of China (BOC), and Agricultural Bank of China (ABC)—launched a pilot program on October 14, 2025, allowing customers to use digital yuan (e-CNY) deposits for approved cryptocurrency trading on government-licensed platforms.
Controlled Liberalization Under Central Bank Oversight
The initiative, conducted under strict supervision from the People's Bank of China (PBOC), represents a carefully calibrated approach to cryptocurrency engagement following the comprehensive trading ban implemented in 2021. Participating banks will enable customers to transfer digital yuan balances to two licensed cryptocurrency trading platforms operating in designated financial technology zones in Shanghai and Shenzhen, with initial trading limited to Bitcoin, Ethereum, and selected large-cap assets.
Capital Controls and Transaction Limitations
The pilot program incorporates substantial safeguards including individual monthly trading limits of 50,000 yuan ($6,850), mandatory identity verification through China's social credit system, and real-time transaction monitoring for anti-money laundering compliance. Users must complete financial literacy assessments before gaining trading access, and all transactions are fully traceable through the digital yuan's centralized architecture.
Geopolitical and Economic Motivations
Analysts interpret this policy evolution as reflecting China's strategic calculation to maintain influence over the cryptocurrency sector rather than ceding the space entirely to Western financial systems. The approach allows controlled participation while maintaining capital account restrictions and preserving the PBOC's monetary policy autonomy. Additionally, it provides regulatory authorities with comprehensive data on cryptocurrency flows involving Chinese citizens.
Market Response and International Implications
Bitcoin experienced a brief 4% price increase following news of the pilot announcement, with trading volumes in Asian markets surging 58%. Cryptocurrency industry leaders view the development as potentially precedent-setting, suggesting that other nations with restrictive crypto policies might adopt similar controlled-access frameworks. The pilot's success or failure will likely inform broader policy decisions about cryptocurrency integration in China's financial system throughout 2026.
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