China MPS to Set National Crypto Rules, Bars Local Laws
China’s Ministry of Public Security (MPS) is drafting a national virtual currency regulation to standardize the legal framework for digital assets. The proposal follows a report by the Henan Provincial People’s Congress, which confirmed that virtual currencies qualify as property and are treated as forensic assets in criminal cases. With crypto trading banned and no sanctioned exchange platforms, local authorities face inconsistent processes for confiscating and managing digital tokens. The MPS’s national virtual currency regulation will preempt local laws, aiming to streamline investigation and disposal procedures. A unified framework could strengthen enforcement and clarify crypto asset status in judicial practice.
Neutral
The news clarifies the legal framework by recognizing virtual currencies as property and standardizing disposal procedures at the national level. However, China’s ban on cryptocurrency trading remains unchanged, and no new approval for trading platforms is indicated. As such, this development is procedural rather than market-opening. While a unified regulation may reduce enforcement uncertainty, it does not directly influence trading liquidity or prices. Historical precedents show that clarifications in China’s regulatory environment can stabilize on-chain activity but rarely trigger bullish rallies without market liberalization. Thus, the short-term and long-term market impact is likely neutral.