China has reinforced its hardline stance on virtual currencies, warning that speculative activity has returned and pledging to intensify enforcement against illegal financial behaviour tied to stablecoins. The warning followed a coordination meeting on Friday led by the People’s Bank of China (PBOC) and attended by 12 top government bodies, according to an official statement carried by state media and reported by the South China Morning Post.
In a statement issued on Saturday, the PBOC said that “business activities related to virtual currencies constitute illegal financial activities.” It added that stablecoins, which it classifies as virtual currencies, do not currently meet China’s requirements for customer identification and anti money laundering controls.
Authorities cautioned that stablecoins may be exploited for unlawful behaviour, including fundraising fraud and unauthorised cross border fund transfers. Regulators at the meeting, which included the Ministry of Public Security and the China Securities Regulatory Commission, said virtual currencies “should not and cannot” be used in market circulation.
A Renewed Warning as Global Stablecoin Rules Expand
Despite China’s blanket crypto ban in place since 2021, industry data show that bitcoin mining activity has increased this year as operators take advantage of abundant energy supplies. The PBOC’s warning comes as other governments formalise the role of stablecoins, including the European Union’s regulatory regime that took effect in 2024 and new frameworks launched in the UAE, United States, Hong Kong and Japan.
While global interest in stablecoins accelerates, Beijing has doubled down on promoting the digital yuan. The PBOC has expanded cross border trials and recently opened an international operations centre in Shanghai to support the e-CNY’s use abroad.
PBOC governor Pan Gongsheng last month cautioned that stablecoin speculation could undermine the monetary sovereignty of developing economies. He pledged to further optimise the management of the digital yuan and increase commercial bank participation in the system.
China’s renewed stance signals that, even as CBDCs gain momentum globally, Beijing remains deeply wary of decentralised and privately issued digital assets. The priority remains clear, strengthen enforcement, limit financial risks and accelerate adoption of the state controlled e-CNY.