China prohibits cryptocurrency trading, mining, and services, according to the government's sweeping ban.

China prohibits cryptocurrency trading, mining, and services, according to the government's sweeping ban.

China's cyberspace regulators have summoned Nvidia CEO Jensen Huang to address concerns over potential "backdoor safety risks" in the company's H20 chips [1]. This meeting comes amid heightened scrutiny of advanced semiconductor technologies in both the U.S. and China. Chinese officials highlighted that the H20 chips could be tracked and potentially disabled remotely, posing cybersecurity risks to end users. Nvidia has maintained that it does not embed backdoors into its products that would enable unauthorized remote access or control [1].

The incident underscores the deepening tension between U.S. and Chinese regulatory approaches to high-tech exports. While the H20 is less powerful than Nvidia’s H100, it still offers capabilities that current Chinese chip designs cannot match. As both nations seek to dominate the artificial intelligence landscape, the issue of semiconductor security is expected to remain a focal point of geopolitical and economic friction.

Separately, China is reportedly reconsidering a ban on Bitcoin ownership, potentially extending its existing restrictions on trading and mining to private digital asset holdings [2]. While no official legislation has been confirmed, internal discussions within the regulatory sphere suggest Beijing is exploring deeper controls on public access to decentralized cryptocurrencies. This could require individuals to move their Bitcoin offshore to avoid legal risks, marking a significant shift from previous policies that allowed personal holdings [2].

The potential move has already triggered market concerns, especially in Asia, where Chinese regulatory decisions often influence regional sentiment. Bitcoin's price history has shown sensitivity to policy shifts in China, with past bans on trading and mining causing short-term volatility. Analysts note that a new ban on ownership could further amplify uncertainty, affecting not only prices but also global mining distribution and adoption trends [2].

Notably, while China has taken a hard stance on public crypto activity, it appears to be developing its own digital currency strategy. Officials are reportedly showing interest in a yuan-backed stablecoin, which could serve as a regulated digital asset for cross-border transactions. This suggests a strategic shift from outright bans to a state-led approach aligned with China’s broader digital yuan ambitions [2].

Despite the restrictions, reports indicate that China may still hold a significant amount of Bitcoin, likely acquired before the 2021 trading and mining bans. This highlights a complex dynamic where the country restricts public access to crypto while maintaining strategic digital asset reserves [2].

Globally, Bitcoin remains a strong asset, with 97% of Bitcoin wallets in profit as of late July 2025, according to a report by Glassnode. This reflects a matured market with high liquidity, even amid regulatory challenges [3].

The possible return to stricter ownership controls could further distance China from global crypto markets, particularly as other countries explore digital assets as alternatives to traditional fiat. Meanwhile, geopolitical tensions are also shaping the regulatory landscape, with Beijing reportedly preparing national security countermeasures in response to U.S. policies [5].

In a separate development, MicroStrategy has announced its intention to accumulate up to 5% or 7% of the total Bitcoin supply, reinforcing global institutional interest in the asset despite regulatory headwinds [6].

As the situation evolves, investors are closely watching for any official statements from Chinese regulators. A new ban on Bitcoin ownership could have far-reaching implications for both the crypto market and digital asset regulation globally.

References:
[1] https://fortune.com/2025/08/01/nvidia-jensen-huang-china-cybersecurity-backdoor-safety-risks-h20-chips/
[2] https://www.ainvest.com/news/bitcoin-news-today-china-reported-bitcoin-ownership-ban-digital-yuan-push-2508/
[3] https://news.futunn.com/en/post/59914255/97-of-bitcoin-wallets-are-now-in-profit-what-does
[5] https://www.yahoo.com/news/articles/beijing-preps-national-security-countermeasures-161105436.html
[6] https://cryptobriefing.com/bitcoin-supply-strategy-microstrategy/