China Reaffirms Ban on Crypto, Labels Stablecoins a Security Threat

The People’s Bank of China (PBoC) has reiterated its strict ban on cryptocurrency activities, issuing a stern warning regarding the resurgence of digital asset speculation. Following a multi-agency meeting involving thirteen government bodies, the central bank emphasized that digital assets hold no legal status in the country.

"Virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market," the PBoC stated. The regulator declared it would "severely crack down on illegal and criminal activities" related to digital assets.

Stablecoins drew specific criticism, with officials describing them as a threat to financial security. The central bank noted that these assets often fail to meet anti-money-laundering (AML) and customer identification standards, facilitating illegal cross-border transfers and fraudulent fundraising. This echoes earlier sentiments from former PBoC governor Zhou Xiaochuan, who warned of stablecoins being "overused for asset speculation."

While acknowledging that the 2021 nationwide ban had "rectified the chaos," authorities noted that new forms of trading continue to emerge through informal channels. The statement also highlighted the contrasting regulatory landscape between the mainland and Hong Kong, suggesting heightened scrutiny on mainland firms attempting to leverage Hong Kong's licensed digital asset framework.