In a decisive move, China”s central bank has amplified its anti-cryptocurrency rhetoric, marking a significant escalation in its ongoing crackdown on digital assets. The People”s Bank of China (PBOC) issued its most forceful warning this year, declaring an intensified effort to combat illegal financial activities associated with virtual currencies, with stablecoins now at the forefront of its concerns.
This statement followed a high-level inter-agency meeting in Beijing, where the PBOC alongside other regulatory bodies analyzed recent trends in the market. Their findings indicated a resurgence of cryptocurrency speculation, which has been officially banned since 2021, surfacing covertly through underground channels and international platforms.
In its communications, the PBOC reiterated that digital tokens lack the legal status of fiat currency and are prohibited from being used as money within the country. The authorities underscored the persistent illegality of virtual-asset activities, emphasizing that stablecoins, in particular, pose increased risks related to financial crimes and compliance failures.
The central bank highlighted that stablecoins do not align with China”s stringent requirements for customer identification and anti-money-laundering (AML) measures. Officials warned that these digital assets are increasingly exploited for unlawful cross-border fund transfers, fraud, and other unauthorized financial practices.
To strengthen its regulatory framework, the PBOC plans to enhance its monitoring systems and foster greater cooperation among agencies to effectively track cryptocurrency activities. This includes improved data sharing and stricter oversight of financial intermediaries that may be facilitating crypto transactions.
Despite the firm stance against cryptocurrency trading and mining since 2021—which the government argues threatens financial stability and encourages capital flight—recent developments suggest that enforcement gaps remain. Industry analyses reveal that China has once again become a significant player in the global Bitcoin mining sphere, contributing to approximately 14% of the world”s hash rate as of October, largely through discreet operations in regions known for affordable electricity and burgeoning data-center infrastructure.
While the central bank did not specifically address the mining resurgence in its latest statements, previous comments from PBOC officials, including Governor Pan Gongsheng, indicated a continued commitment to suppressing both mining and any domestic crypto speculation.
The renewed pressure from Beijing stands in stark contrast to the regulatory approach taken by Hong Kong, which has been working on establishing a framework for stablecoin issuers to position itself as a digital asset hub. However, progress in this area has stalled, with no licenses granted yet and several companies reportedly halting their stablecoin initiatives due to concerns from mainland authorities.
China”s latest communications leave little doubt about its intentions: while other global regulators are contemplating how to incorporate digital assets into their financial systems, Beijing remains resolute in its strategy to keep cryptocurrencies out of both its banking system and its borders.
