Chinese regulators have asked banks to integrate blockchain technology into their ‘ bank-tax interaction’ model, intending to reduce information gaps and boost financing for small businesses.
Standardizing Bank-Tax data for SME financing
A joint policy notice issued by the State Administration of Taxation and the National Financial Regulatory Administration issued a notice to encourage banks and local tax authorities to use blockchain, along with privacy computing technologies, to standardize and secure data exchanges between tax authorities, banks, and enterprises.
According to the report, this will help in innovating the “bank-tax interaction” or the BTI model. The model is where the banks provide credit lines to small and medium enterprises (SMEs) based specifically on their historical tax payment data in China.
The journey of Crypto’s regulatory status
In January 2025, China’s National Development and Reform Commission issued a roadmap with the incorporation of blockchain technology into the country’s data infrastructure. The anticipated time of implementation across the nation is by 2029 according to the media.
The project is expected to bring in a huge investment of around $58 billion a year, or 400 billion yuan, according to Key officials like Shen Zhulin, deputy director of the National Data Administration
China’s president Xi Jinping called blockchain a “breakthrough” and has mandated the integration of the technology into real-world use cases. The country has also expanded their first blockchain-based electric invoice system.
Small businesses in China often faced concerns about accessing credit due to limited credit history or due to bad information barriers between tax offices and lenders. Blockchain technology is believed to improve these grounds with faster and reliable data supported by privacy.
China moves from anti-crypto to strict crypto but developing infrastructure
While China has issued strict controls on cryptocurrencies and speculative digital asset trading, it also pushed for the incorporation of blockchain initiatives in finance and data infrastructure. The country banned crypto to ensure a centralized country over their monetary system.
In April 2021, the Shenzhen Tax Bureau expanded the country’s first blockchain electronic invoice system. However, as part of a broader push by government agencies, China implemented a nationwide ban on crypto transactions and mining in September of that year.
New regulations introduced in February 2026 have expanded their frameworks, particularly for stablecoins and tokenized real-world assets. Key changes to note include the mandatory approval process for issuing stablecoins pegged to the RMB.
Unauthorized tokenization of assets is now clearly classified as an illegal financial operation under a new regulatory framework issued by eight different government departments.
However, as of 2026, major cryptocurrencies including Bitcoin, Ethereum and stablecoins such as USDT, have still not received a legal tender status in China.
