China Bitcoin legalization is priced at 5% but Beijing’s February 2026 Ban 2.0 made one detail brutal

Polymarket traders are assigning only a 5% probability to the People's Republic of China announcing by the end of 2026 that its citizens can legally buy Bitcoin using yuan onshore. This low probability reflects the recent regulatory environment, particularly the February 2026 "Ban 2.0" notice, which codified virtual-currency business activity as illegal financial activity and explicitly targeted marketing, traffic facilitation, and payment rails supporting crypto.

The regulatory structure clearly distinguishes between mainland China and Hong Kong. Hong Kong serves as a controlled regulatory laboratory, allowing offshore experiments like spot crypto ETFs and licensed stablecoins, but this access does not legalize onshore RMB-to-Bitcoin purchases in the mainland. The new framework explicitly prohibits domestic licensing of exchanges and the use of banking rails for crypto-related transactions, treating them as violations of "public order and good morals."

Beijing's stance prioritizes monetary sovereignty and capital control, viewing unregulated Bitcoin conversion as a major leak. While China's Bitcoin mining share has rebounded due to local enforcement gaps, this does not signal a policy reversal. The current regulatory trajectory is toward tighter controls, making a reversal by 2026 unlikely without a major catalyst, as the current framework explicitly forbids the onshore retail purchase pathway required to resolve the prediction market favorably.

(Source：CryptoSlate)