China urges banks to adopt blockchain technology to boost credit capacity and data transparency

China’s State Tax Administration (STA) and the National Financial Regulatory Administration (NFRA) have called on banks to accelerate the adoption of blockchain technology to strengthen lending capacity and improve data transparency. In a policy notice issued on Monday, the authorities said the banking system should use blockchain alongside privacy-preserving computing to support secure data sharing.

Policy focus: secure data sharing and lending support

The notice requires banks and local governments to apply blockchain technology combined with privacy-preserving computing to address secure data sharing. It says blockchain can help ensure the integrity and immutability of tax records, while privacy-preserving computing can enable data mining without exposing sensitive business information.

The policy also calls for standardization of data sharing between banks and local governments. The aim is to improve transparency of tax payment histories, so that legitimate businesses can access better credit incentives.

Broader push for blockchain in national data infrastructure

The move is described as part of China’s longer-term plan—accelerated since early 2025—to integrate blockchain into national data infrastructure. The stated goal is to build a comprehensive data governance system by 2029.

Mr. Shen Zhulin, Deputy Director of the National Data Administration, said at a January 2025 press briefing that China expects a blockchain-based data infrastructure to attract about 400 billion yuan (roughly $58 billion) in investment per year.

Context: blockchain promotion alongside crypto restrictions

While China maintains strict controls on cryptocurrency and crypto-asset speculation, it continues to promote blockchain initiatives within financial infrastructure and the national data system. In October 2019, China described blockchain as a “major breakthrough” in mastering core technologies and urged accelerating development of applications and bringing the technology into real-world economic life.

By April 2021, the tax authority in Shenzhen expanded a blockchain-based electronic invoicing system, described as one of the earliest deployed models in tax administration. In September 2021, China issued a comprehensive ban on cryptocurrency trading and mining as part of a broader crackdown.

Despite the ban on crypto trading and mining, China remains a major Bitcoin mining hub. As of January 2026, China accounted for about 11.7% of total hashrate worldwide, according to data from Compass Mining.

Hong Kong: cautious approach to stablecoin licensing

Separately, while mainland China keeps a strict crypto ban, Hong Kong is positioned as an international hub for digital assets. The territory has licensed several exchanges and allowed retail investors to access and trade some popular crypto assets.

However, recent steps indicate caution. The Hong Kong Monetary Authority (HKMA) decided to delay the licensing framework for crypto stablecoins pegged to the Hong Kong dollar. Although the initial plan anticipated a launch in March, the authority said it remains in the finalization process and will announce at an appropriate time.

e-CNY developments: expanded participation and interest-bearing treatment

China’s central bank digital currency (e-CNY) has also seen rapid deployment. From January 1, 2026, e-CNY began to be treated as a digital deposit rather than merely “digital cash” as before. Commercial banks have been allowed to pay interest on balances in customers’ e-CNY wallets, making it one of the first CBDCs able to earn interest similar to a savings deposit.

On April 2, 2026, the People’s Bank of China (PBOC) added 12 banks to the list of institutions allowed to participate in operating the e-CNY system, expanding the practical deployment of the CBDC.