Many people are asking why the domestic approach to virtual currencies is so cautious. Looking at how freely they are being used abroad, we have many restrictions here. Understanding this is quite straightforward: cryptocurrencies are too free, so free that they are hard for governments to manage.

Imagine a scenario and you'll understand.

Suppose you sell a house in a first-tier city and receive 5 million. Now you want to convert the money into US dollars for normal use abroad.

What is the proper channel to follow?

The bank gives you an annual foreign exchange purchase limit of 50,000 USD, and the remittance limit is also 50,000, blocking you at both doors.

Want to convert 5 million to 700,000 USD?

Sorry, two options: either wait 14 years, or forget about it.

You might ask about exchanging limits with others? You can, but if you exceed a certain number of transactions with multiple people's limits, you'll immediately attract attention;

Carrying cash in USD? If it's over 5,000 USD, you have to declare it;

Taking RMB out of the country? The limit is 20,000;

Want to directly remit RMB? That's even more impossible; not a penny can go out.

In other words, all legal pathways are tightly blocked.

But cryptocurrencies don't follow these routes at all.

You find a few people to exchange for stablecoins and transfer everything into your own wallet.

With a mnemonic phrase and a USB drive, you can take millions "in your pocket" abroad.

No need for banks, no declarations, and no SWIFT; as long as you don’t say anything, no one will know how much you brought.

Isn't this thing stronger than gold?

Gold has to be physically carried, heavy and troublesome;

Cryptocurrency? Just remember 12 words.

This ability to bypass foreign exchange controls is not a trivial matter for any country.

Now let's talk about taxes.

On-chain transactions are anonymous, with no real-name system, no bank flow; in real life, your income may seem average, but your on-chain wallet could hold millions, which the Golden Tax Phase IV cannot track.

If this were fully legalized and circulated on a large scale, the tax system would directly malfunction.

So now you understand, the issue is not with the technology or the risks of price fluctuations,

but that cryptocurrencies are inherently a system of "decentralization, cross-border, and anonymity," completely misaligned with the logic of national regulation.

In summary:

It's not that it can't be played with, but it can't be allowed to become a financial system parallel to fiat currency.

Otherwise, foreign exchange, taxation, and fund security become very difficult to manage.

If you think from the perspective of a regulator, you would make the same choice.