Recently, people keep asking: "When will crypto asset trading be allowed in China?" I've heard this question so many times that I might as well spell it out today—it's not that the direction is wrong, it's just that the timing isn't right yet.

To get straight to the point: Don’t get your hopes up in the short term; it’ll take at least another 5 to 8 years. Want to participate in crypto assets compliantly in China? Right now, it’s just not realistic. But if you look at the long term, the shift from "strictly prohibited" to "limited opening" is bound to happen sooner or later. Why? Let’s start with the underlying logic.

Where's the core contradiction? Currently, crypto assets are like a crack in the flood control dike for China’s economy. Domestic assets—like real estate and A-shares—have long been valued higher than similar assets overseas. Maintaining this valuation gap largely depends on cross-border capital controls. Imagine your pool’s water level is higher than your neighbor’s, separated by a wall; if the wall gets a hole, the water will inevitably rush out. Crypto assets are that potential "breach"—decentralized, hard to regulate, capable of cross-border flow—naturally a channel for capital outflow.

Now let’s talk about the current stage. Economist Richard Koo’s “balance sheet recession” theory may sound academic, but it’s actually easy to understand: Over the past decade or so, companies expanded aggressively, individuals leveraged up to buy property, and local governments borrowed heavily for infrastructure, piling up debt to the tipping point. Now? Companies find their profits can’t cover debt costs, individuals see housing prices stagnate while still having to pay mortgages, and local governments have no surplus to start new projects. So everyone is doing the same thing—paying down debt, rather than taking on new debt to invest.

This is the “deleveraging” cycle. Companies aren’t expanding production, households aren’t buying more property, and the whole economy spirals into contraction. At this critical juncture, what would happen if crypto asset trading were opened up? Capital would flow out to overseas markets even faster, domestic asset valuations could crash, and deleveraging would turn into a "hard landing"—the consequences would be unimaginable. So the current strict control policies are essentially "stopping the bleeding"—stabilizing domestic asset prices to get through this downturn.

But what about the long term? Once deleveraging is basically done, asset valuations return to reasonable levels, and cross-border capital flow pressure eases, the "systemic risk" from crypto assets will drop. At that point, regulators might introduce restricted, traceable compliant channels—like specific licenses, real-name trading, quota management, and so on. It won’t be fully open, but it won’t be a blanket ban either.

Why is the timeline 5 to 8 years? Because repairing balance sheets is a slow process—Japan took more than a decade, and with China’s larger economy and more policy tools, even an optimistic estimate puts the cycle at about the same length. So the answer is clear: it’s not never, it’s just not the right time now. Really want to participate? Either wait for the policy window, or use compliant overseas channels. Don’t rush—the wheels of history keep turning, and what’s meant to come will eventually come.