As economic tensions between China and the U.S. continue to escalate, new reports suggest that some Chinese provinces have started selling large amounts of confiscated Bitcoin through unofficial and unregulated channels.


Despite Beijing’s strict public stance against cryptocurrencies, an investigation by Reuters revealed that local authorities may be exploiting legal loopholes to liquidate digital assets seized in criminal or financial cases.


According to the report, these provinces are turning to private international brokers—such as the company Jiafenxiang—which is said to have facilitated up to $3 billion worth of Bitcoin sales. The proceeds are reportedly being used to address local budget deficits amid slowing economic growth.


This discrepancy between official policy and local practice raises questions about the central government’s control over crypto-related matters. There have even been recent proposals to nationalize these confiscated digital assets by converting them into a state-controlled strategic reserve.


Amid ongoing U.S. sanctions and fears of a weakening yuan, analysts speculate that China may be quietly exploring cryptocurrencies as a hedging tool or even as a medium for settling international transactions—similar to what’s been reported in Russia’s energy sector.


Caught between public disapproval and private utilization, China’s double standard on crypto continues to blur the lines between policy and practice—making this a story to watch closely.