China Reaffirms Crypto Ban as Stablecoin Speculation Resurges
- People’s Bank of China warns that “virtual currency speculation has resurfaced.”
- China reiterates that all crypto-related activities remain illegal.
- Central bank flags stablecoins as a major risk tied to AML and crime.
- China vows to intensify its crackdown with 12 other agencies.
- Reports show China still accounts for 14% of global Bitcoin mining.
China is doubling down on its anti-crypto stance after the People’s Bank of China (PBoC) announced that virtual currency trading activity has reemerged despite the country’s strict 2021 ban. Following a meeting with 12 other government bodies, the central bank warned that “virtual currency speculation has resurfaced,” creating new challenges for financial stability and risk control.
The PBoC emphasized that cryptocurrencies have no legal status in the country and cannot be used as currency in any market setting. Regulators reiterated that all crypto-related business activities — including trading, mining, and financial services — remain illegal in mainland China.
A major focus of the latest warning is the growing use of stablecoins. China’s central bank described stablecoins as a form of virtual currency that currently fails to meet legal requirements around customer identification and anti-money-laundering (AML) standards. According to the PBoC, this makes stablecoins vulnerable to misuse in money laundering, fraudulent fundraising schemes, and illicit cross-border fund transfers.
To combat these risks, the bank pledged to “persistently crack down” on illegal crypto activities to safeguard economic and financial stability. The 13 agencies involved in the meeting also committed to deeper cooperation, promising improved information sharing and enhanced monitoring capabilities to track down crypto users.
Despite China’s official ban, the country still plays a major role in global Bitcoin mining. According to recent data, China held a 14% share of the Bitcoin mining market as of late October. Meanwhile, financial regulators have taken steps to suppress stablecoin-related activity, reportedly instructing brokers in August to cancel seminars and halt promotions related to stablecoin research.
This contrasts sharply with Hong Kong’s regulatory approach. While Hong Kong opened licensing channels for stablecoin issuers earlier this year, several tech firms reportedly paused plans after pressure from mainland Chinese authorities.
Final Thought
China’s renewed warning shows that authorities are closely watching crypto activity despite the nationwide ban. With stablecoins now at the center of regulatory concern, the country appears committed to tightening its grip even further as speculation continues to resurface.
