Multi-agency meeting highlights renewed scrutiny as Beijing flags digital asset speculation and financial stability concerns
China has once again reinforced its hardline stance against digital assets, signaling a renewed phase of enforcement and heightened scrutiny. Following a multi-agency meeting in Beijing, the People’s Bank of China (PBoC) issued its strongest warning since the 2021 blanket ban, stressing that virtual currencies hold no legal status and cannot be used as currency in the market.
China’s Stance on Crypto Use and Market Activity
In its statement, the PBoC emphasized that “digital asset operations are illegal” and vowed to intensify efforts to curb criminal activity tied to cryptocurrency trading and mining. The meeting, attended by representatives from thirteen government bodies, was convened due to a “resurfacing of digital asset speculation” despite years of regulatory pressure.
According to regulators, the 2021 ban “rectified the chaos in the virtual currency market” and brought what they described as significant stabilization. Authorities reiterated their position that digital tokens lack legal tender attributes and cannot be integrated into the domestic financial system under any circumstances.
Stablecoins Identified as Major Financial Risks
Stablecoins received some of the strongest criticism. The PBoC said they fail to meet essential know-your-customer and anti-money-laundering standards, calling them a threat to national financial security.
The central bank highlighted risks of money laundering, underground transfers, illegal fundraising, and cross-border capital movement, noting that these instruments undermine China’s regulatory perimeter.
Former PBoC governor Zhou Xiaochuan has also warned that overuse of stablecoins for speculation could trigger instability in the financial system, underscoring long-term concerns among policymakers.
Beijing Tightens Oversight as Hong Kong Embraces Digital Assets
While mainland China maintains its ban on cryptocurrency trading and mining, Hong Kong has pursued a regulatory framework for exchanges and stablecoin issuers. Still, Beijing has recently intervened, urging major brokerages to pause tokenization initiatives and discouraging large tech firms from launching stablecoins in the region.
At the same time, China continues to advance its digital yuan pilot, which now counts more than 225 million personal wallets, signaling the country’s commitment to a state-controlled digital financial system.
China’s reaffirmation of its crypto ban, paired with a sharper focus on stablecoin risks, underscores a tightening regulatory environment aimed at protecting financial stability. As global stablecoin adoption grows, Beijing appears determined to ensure these assets do not gain traction within its borders.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.