Polymarket merchants are pricing the prospect of China legalizing onshore Bitcoin purchases at roughly 5%.
At first look, the quantity seems dismissive. Nonetheless, it raises the query of whether or not the Chinese language authorities will explicitly allow residents to transform renminbi into Bitcoin inside mainland China by the tip of 2026.
That distinction issues as a result of the regulatory structure Beijing not too long ago accomplished factors in the wrong way.
The prediction market asks a binary query: Will the Folks’s Republic of China announce by Dec. 31, 2026, that Chinese language residents can legally purchase Bitcoin with yuan inside China?
The decision hinges on the announcement itself, not on implementation. It excludes Hong Kong sandboxes, offshore merchandise, and institutional workarounds. This can be a check of onshore banking rails and authorized buy pathways, the precise infrastructure China spent the final yr systematically dismantling.
The ban simply acquired stronger
In February 2026, Chinese language regulators issued a sweeping joint discover that successfully codified “Ban 2.0.” The doc reaffirms that virtual-currency enterprise exercise constitutes unlawful monetary exercise and that crypto holds no authorized tender standing.
Nonetheless, it extends past the September 2021 framework it replaces, explicitly focusing on advertising, site visitors facilitation, cost clearing, and even the naming or registration of entities that assist crypto exercise.
The discover singles out stablecoins as a precedence enforcement space, banning unauthorized offshore issuance of yuan-pegged stablecoins and framing them as vectors for anti-money laundering gaps, fraud, and unauthorized cross-border fund transfers.
It additionally introduces a civil deterrent: investing in digital currencies or associated merchandise now violates “public order and good morals,” rendering such transactions legally invalid and imposing private losses on traders.
This wasn’t a marketing campaign memo. It abolished the 2021 discover, establishing itself as the brand new authorized baseline. For anybody wagering on a reversal by year-end, the timeline seems to be punishing.
| Coverage layer | What it’s (plain English) | Does this fulfill Polymarket “YES”? | Mainland standing (submit–Feb 2026 framework) | Hong Kong “stress valve”? |
|---|---|---|---|---|
| Onshore retail buy (RMB→BTC) | Common individuals can legally convert yuan into Bitcoin inside mainland China (through apps/exchanges/OTC which are authorized). | Sure | Prohibited | No — HK doesn’t change legality of onshore RMB→BTC purchases within the mainland. |
| Exchanges / buying and selling venues (home licensing) | PRC-licensed crypto exchanges or buying and selling venues function legally and might serve mainland residents. | No | Prohibited / focused | Sure — HK can license VASPs/venues, however this stays offshore and doesn’t legalize mainland venues. |
| Banking rails (RMB deposits/settlement) | Banks/cost companies can present RMB accounts, deposits/withdrawals, and settlement/clearing for crypto-related transactions. | No (except it explicitly permits authorized RMB→BTC buy onshore) | Focused / prohibited (rails and facilitation are a spotlight) | Partial — HK banking rails can assist licensed HK exercise; doesn’t reopen RMB rails for mainland crypto buying and selling. |
| Custody / brokerage merchandise | Regulated entities can custody BTC for purchasers or supply brokered BTC publicity (funds, structured notes, wrappers). | No | Prohibited (handled as “virtual-currency associated merchandise/exercise”) | Sure — HK can host regulated merchandise (e.g., ETFs/custody) in a contained jurisdiction. |
| Mining legality | Mining is authorized/regulated (licenses, taxes, grid entry) relatively than banned/punished. | No | Prohibited (no lodging; enforcement might differ domestically) | No — HK shouldn’t be a mining hub; doesn’t legalize mainland mining. |
| Hong Kong entry (ETFs / stablecoins) | Publicity through HK spot crypto ETFs; stablecoins beneath HK licensing; tokenization pilots beneath HK guidelines. | No (explicitly excluded by the market’s “inside China” framing) | Not relevant to mainland legality; mainland restrictions nonetheless apply | Sure — ETFs + stablecoin licensing + supervised pilots act as offshore experimentation with out mainland liberalization. |
| Offshore institutional workarounds | Offshore exchanges/merchandise/establishments supply BTC publicity; mainland customers entry through VPNs/OTC/cross-border channels. | No | Focused / prohibited (particularly solicitation/advertising/site visitors facilitation and cross-border fund movement vectors) | Partial — HK can host merchandise, however “mainland entry” stays politically gated and doesn’t meet the onshore buy criterion. |
Hong Kong as a managed experiment
Beijing’s method to crypto turns into clearer when considered by way of the lens of Hong Kong’s function as a regulatory laboratory.
In April 2024, Hong Kong launched Asia’s first spot Bitcoin and Ethereum ETFs, explicitly marketed as merchandise for a jurisdiction the place mainland buying and selling stays banned.
The town’s stablecoin licensing framework took impact in August 2025, although as of early 2026, the Hong Kong Financial Authority’s register confirmed zero licensed issuers.
The primary batch is predicted in March 2026, and regulators have signaled will probably be “a really small quantity.”
Even offshore experimentation faces political constraints. The Monetary Instances reported that Chinese language tech giants, together with Ant Group and JD.com, suspended plans for a Hong Kong stablecoin after Beijing intervened.
The message: innovation can proceed in managed environments, however solely when it reinforces relatively than circumvents central oversight.
This construction permits Beijing to allow the usage of contained pilots, corresponding to ETFs, tokenization frameworks, and licensed stablecoins, whereas sustaining an impermeable barrier to onshore renminbi-to-Bitcoin conversions.
Hong Kong capabilities as a stress valve, not a preview of mainland coverage.
The tokenization paradox
China’s February 2026 regulatory blitz additionally clarified the place digital property are permitted: in tightly supervised, permissioned tokenization lanes.
On Feb. 6, the China Securities Regulatory Fee tightened oversight for offshore tokenized asset-backed securities tied to onshore property, requiring enhanced filings, disclosures, and cross-border coordination.
The identical day, a discover from the Folks’s Financial institution of China paired the digital forex crackdown with language stipulating that tokenized merchandise backed by onshore property can be topic to strict vetting.
Three days later, Reuters framed the transfer as establishing a authorized pathway for offshore issuance of tokens backed by mainland property, whilst real-world asset issuance domestically stays banned.
The interpretation aligns with Beijing’s broader posture: digital finance is suitable when it is auditable, state-supervised, and routed by way of permitted entities. Unregulated buying and selling shouldn’t be.
McKinsey forecasts a tokenized asset market capitalization of roughly $2 trillion by 2030, with a bullish case round $4 trillion, excluding “crypto like Bitcoin.”
Beijing can concurrently be aggressively pro-tokenization and anti-Bitcoin buying and selling, as a result of tokenization aligns with the state’s surveillance and management infrastructure.
One information level complicates the tightening narrative: China’s Bitcoin mining share rebounded to roughly 14% by October 2025, based on the Hashrate Index, with some trade estimates inserting it between 15% and 20% of worldwide mining.
This resurgence occurred regardless of the mining ban and suggests enforcement gaps on the native degree.
However this dynamic displays compliance drift, not coverage reversal. Native tolerance of underground mining does not translate into authorized readability on the nationwide degree, and Beijing’s February 2026 discover makes no lodging for mining exercise.
What 5% odds truly value
Polymarket’s present pricing displays a cluster of low-probability eventualities.
Probably the most believable path to a “Sure” decision entails a slender onshore pilot: a state-supervised platform in a free-trade zone that allows restricted renminbi-to-Bitcoin purchases, topic to strict capital caps and know-your-customer controls.
Such a pilot would require express licensing pathways, entry to banking providers, and a shift away from “unlawful monetary exercise.”
Nothing within the present regulatory surroundings indicators motion towards that final result. The February 2026 framework shifted the Overton window in the wrong way, treating virtual-currency companies not as a grey space to be tolerated however as unlawful actions to be extinguished.
A secondary situation, which is oblique Bitcoin publicity through tightly regulated merchandise, would possibly achieve traction, corresponding to mainland traders accessing Hong Kong crypto ETFs by way of permitted channels.
Nonetheless, this would not fulfill Polymarket’s decision standards, which hinge on a authorized onshore renminbi-to-Bitcoin buy.
Sovereignty lens and indicators value watching
Beijing’s hardline posture additionally aligns with broader anxieties about financial sovereignty.
In 2025, the Financial institution for Worldwide Settlements famous that greater than 99% of stablecoins are denominated in US {dollars}, elevating issues about stealth dollarization and capital-control evasion, that are exactly the vulnerabilities Chinese language regulators cite when justifying crypto restrictions.
For a authorities that views capital controls as important to macroeconomic stability, allowing unregulated renminbi-to-Bitcoin conversion would quantity to opening a everlasting leak within the dam.
The political value of such a reversal, particularly absent a disaster that forces Beijing’s hand, seems to be prohibitively excessive.
If the percentages had been to maneuver meaningfully, sure triggers would precede the shift. A proper assertion from the State Council or the Folks’s Financial institution of China establishing a authorized pathway for licensed exchanges or brokers to function domestically can be the clearest sign.
Banking permissions permitting renminbi accounts to settle transactions for crypto platforms can be one other. Language shifts in official notices, from “unlawful monetary exercise” to “regulated exercise,” would point out a conceptual reframing.
Free-trade zone bulletins explicitly allowing the acquisition of renminbi with Bitcoin inside designated geographic areas may fulfill Polymarket’s decision standards with out requiring nationwide legalization. None of those indicators has appeared.
The regulatory trajectory since late 2025 has been unidirectional: tighter controls, clearer prohibitions, and extra express civil and legal deterrents.
The actual wager
Polymarket merchants aren’t pricing whether or not China will “embrace crypto” or “turn into blockchain-friendly.” They’re pricing within the chance that Beijing will reverse a newly bolstered coverage framework inside a yr, allow residents to transform state forex into an asset the federal government deems unlawful, and achieve this with none discernible political or financial catalyst.
What Beijing has constructed as a substitute is a bifurcated system: permissioned digital finance beneath state oversight, and continued prohibition of decentralized buying and selling.
Hong Kong can host experiments. Tokenization can proceed on managed rails. Stablecoins can achieve licenses beneath strict circumstances. However onshore renminbi-to-Bitcoin purchases stay incompatible with the regulatory logic that China spent 2025 and early 2026 hardening into legislation.
The structure is not ambiguous. It is express, codified, and expansive. Betting on a reversal by December 2026 is not simply betting towards present coverage, however betting towards the framework China simply completed constructing.
