The People”s Bank of China (PBoC) has officially defined stablecoins, categorizing them as virtual currencies carrying significant anti-money laundering (AML) risks. This development follows a high-level meeting held on November 28, 2025, where regulatory measures regarding cryptocurrencies were discussed, further tightening the grip on crypto activities in mainland China.
This meeting underscored China”s ongoing stringent approach to cryptocurrency, posing potential challenges for stablecoin development while directing opportunities toward Hong Kong for cross-border applications. The PBoC reiterated its commitment to rigorously enforce existing bans on speculative trading, emphasizing the importance of compliance with AML regulations.
While Hong Kong continues to present viable avenues for development, the heightened scrutiny within mainland China signifies a shift towards limiting stablecoin usage. This regulatory stance is likely to suppress speculative activities in the local market, leading to a cautious atmosphere among industry insiders who anticipate further clarification on the evolving regulations.
Despite the intensity of these regulations, there was a noticeable absence of major statements from prominent industry figures or exchanges connected to the meeting. This silence reflects a community that is prioritizing compliance and adaptation in the face of stringent regulatory changes.
The PBoC has articulated that stablecoins pose substantial risks, such as facilitating money laundering, fundraising fraud, and illegal cross-border fund transfers. As a result, penalties for engaging in stablecoin speculation are expected to increase significantly.
Historically, past bans on cryptocurrency activities in China have led to market shifts towards offshore entities. This precedent may influence the current scrutiny surrounding stablecoins. According to CoinMarketCap, Tether (USDT) maintains a price of $1.00 with a market capitalization of $184.65 billion and a market dominance of 5.92%. However, trading volume has seen a decrease of 23.72% in the last 24 hours, dropping to $58.60 billion.
Although the price of USDT has remained stable over the past three months, the recent regulatory developments may have lasting implications for its market presence. The Coincu research team has noted potential financial and regulatory outcomes stemming from the PBoC”s stricter framework, suggesting that while cross-border payments and supply chain finance applications may thrive in Hong Kong, restrictions in mainland China could shape future stablecoin regulations across other regions.
