First, break “crypto payments” down into actual actions
A merchant receiving stablecoins, a platform converting them into RMB, and fiat currency being paid to suppliers may look like a single product, but in practice it may simultaneously involve virtual currency exchange, fund transfers and cross-border foreign exchange. To determine whether such a business may be operated in mainland China, it is not enough to look at whether the product name contains “payment”; instead, it is necessary to confirm item by item whose assets the platform receives, who makes the conversion decision, and who ultimately bears the payment obligation. Merely labeling the revenue as a technical service fee does not change the services actually provided.
The current basis has been updated to 2026
Notice Yinfa [2026] No. 42, issued by the People's Bank of China and seven other departments, has replaced the relevant 2021 notice. The new rules continue to prohibit, within mainland China, businesses such as the exchange of fiat currency for virtual currency, and prohibit financial institutions, including non-bank payment institutions, from providing services such as account opening, fund transfers and clearing and settlement for virtual-currency-related business. Stablecoins such as Tether do not acquire legal-tender status merely because their prices are relatively stable. Therefore, this is not a problem that can be solved by “obtaining an ordinary payment license to complete the formalities.”
Offshore registration cannot change the actual recipients of services
Assume that an offshore company receives stablecoins from mainland merchants and then arranges for a mainland account to pay RMB to the merchants. Even if the contract chooses foreign law, it is still necessary to examine whether it is illegally providing services to mainland entities. By contrast, arrangements that genuinely take place in offshore markets where the relevant business is permitted and that serve offshore customers require a separate assessment of local market access and China-related factors, and cannot be inferred from this question to be lawful as a matter of course. In particular, where an offshore company controlled by a mainland entity issues virtual currency, the restrictions in the 2026 notice must also be checked separately.
First conduct business exclusion, then product design
In practice, one should first draw a relationship map of customers, contracting entities, wallets, bank accounts and ultimate payees, and mark out mainland residents, mainland merchants, mainland marketing and fund operations item by item. Where a business is confirmed to be prohibited, it should be excluded from the scope of mainland products, rather than seeking collection accounts, offshore shell companies or a change of contract name. For functions that genuinely constitute ordinary software services, it should also be checked whether they in fact undertake transaction pricing, instruction execution or assistance to illegal business, and it must not be presumed that a “technology company” is naturally exempt.
Recommended actions
- Prepare a one-page map of fund flows and service flows, listing the controller of each account and wallet.
- Screen out, item by item, mainland customer onboarding, RMB conversion, mainland settlement and promotional functions.
- Review old plans and contracts against the 2026 notice, and no longer cite only the 2021 document.
Information note: This article provides general information only and does not replace legal advice based on specific facts.
References
- Notice on Further Preventing and Addressing Risks Associated with Virtual Currency and Related Matters (Yin Fa [2026] No. 42) — People's Bank of China and seven other departments
