Obtaining a crypto license in China can be a process supervised by our local agents. As policies in China do not completely ban digital currency transactions, the possibility of opening a company in this sector is within the reach of local and foreign entrepreneurs. We invite you in the following lines to find out information about the Virtual Asset Service Provider (VASP) license in China and other related formalities. We also add that the WFOE in China or the Wholly Foreign-Owned Enterprise can be a suitable business form for international companies in China.
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Regulatory bodies for virtual money in China
China’s Ministry of Commerce proposed several blockchain solutions and continues to settle the cryptocurrency legislation. The following regulatory bodies issued the “Notice on Preventing Bitcoin risks”, a document that comprises information about a crypto license in China and related activities and the possible financial risks and social uncertainty:
- The Securities Regulatory Commission of China.
- The Insurance Regulatory Commission in China.
- The People’s Bank of China.
- The Banking Regulatory Commission of China.
- The Ministry of Industry and Information Technology in China.
In order to reduce the financial risks that involves the cryptocurrency in China, the authorities do not treat virtual money as a “currency”, outlining that the RMB will remain the official currency in China. Opening a crypto company in China requires attention in matters of license. One should apply for Virtual Asset Service Provider (VASP) license in China.
The use of blockchains and Bitcoin in China
The above-mentioned document states that Bitcoin cannot be used for prices on products and services for sale purposes, and therefore, it cannot be used as a financial tool. However, Bitcoin and other cryptocurrencies are not banned in China but are prohibited to be used as currency instead of RMB. It is important to know that cryptocurrency in China is regarded as a “Virtual Commodity”, and therefore, treated as any kind of commodity recognized by Chinese legislation.
The Cybersecurity Administration of China implemented the Blockchain Information Service Management Regulations in order to establish the legal framework for blockchain-based businesses in China and the ways they can operate. For example, blockchain service providers in China must oversee all the activities and stop any illegal content or use. At the moment, there are more than 500 blockchain projects accepted by the Chinese government, several cryptocurrency exchange systems, and cryptocurrency wallet systems.
In order to be able to set up a company in China, you will need a representative to deal with the required formalities. Thus, after the preparation of the documents, we proceed to open a bank account, the registration for the payment of taxes, the preparation of internal regulations, the preparation for obtaining a business license. We also remind you that the minimum share capital of CNY 30,000 is required for the most popular structure available.
The business model for cryptocurrency in China
Choosing the businessmodel for opening a crypto company in China is the first thing to consider. One can create his/her own blockchain platform or might be interested in re-selling bitcoins or any other virtual money. At the moment, there is no specific legislation for cryptocurrency businesses, but a company can run under the rules of a WOFE in China, the simplest business form that addresses to foreign investors. Opening a crypto company in China might take some time before it can be implemented, and that because the authorities continue to create the work for the proper regulatory framework. You are welcome to get in touch with our team if interested in company formation in China and the digital currency field.
Regulatory framework in Hong Kong
Financial Services and the Treasury Bureau of the Hong Kong Special Administrative Region issued the policy referring to the Virtual Asset Development. This policy specifies that Hong Kong works towards the formation of a licensing administration for virtual asset service providers, also known as a Virtual Asset Service Provider (VASP) license in China. Here are other proposed regulations in this sector:
- Regulatory requirements applicable to operators of virtual asset trading platforms were developed. The Securities and Futures Commission (SFC) in China is in charge of controlling them.
- A dual licensing regime applies to security-based tokens. This means that operators must have both a financial license and a crypto license in China.
- A Virtual Asset Service Provider (VASP) license in China is mandatory for operators of non-security-based tokens.
- The information about licensees must be available to the public with no charges.
- The implementation of the Virtual Asset Service Provider (VASP) license in China allows digital asset exchanges.
Short conclusion about crypto license in China
Although China does not recognize cryptocurrency as a legal model of exchange, digital currency transfers in this country are possible. The legislation is quite strict and constantly changing, so it is good to take into account everything new related to the Virtual Asset Service Provider (VASP) license in China. We invite you to discuss more about how to open a crypto company in China with our local experts. They can guide you throughout company incorporation in China.
Statistical data about cryptocurrency in China
Below we present some statistics about cryptocurrency in China:
- In 2023, Chinese crypto trade worth approximately USD 90 billion was reported.
- There are around 900,000 active users in the cryptocurrency field in China.
Besides opening a company in China in the cryptocurrency field, our team can also offer you other services. You can opt for our accountants in China when setting up a business. You can start a company in China with our support, so feel free to contact us at any time.
