China Reasserts Crypto Ban, China Calls Stablecoins a Financial Threat
What Did the PBoC Say later than Its Latest Multi-Agency Meeting?
China’s central bank has repeated its stance that digital assets hold no legal status in the country, issuing one of its toughest warnings since the 2021 ban on trading and mining. Following a meeting involving thirteen government agencies, the People’s Bank of China (PBoC) said it will continue to clamp down on all forms of digital asset activity and highlighted renewed concerns about speculative trading.
“Virtual currencies do not have the identical 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 bank added that it would “severely crack down on illegal and criminal activities,” signaling that authorities are monitoring what they described as a “resurfacing” of .
Officials said the nationwide ban enacted in September 2021 had “rectified the chaos in the virtual currency market” and produced “significant results,” but warned that new forms of trading and cross-border activity continue to appear through informal channels.
Investor Takeaway
Why Are Stablecoins a Key Target?
Stablecoins received the strongest criticism in the PBoC’s statement. Officials said they fail to meet anti-money-laundering and customer-identification rules, pointing to concerns around fraudulent fundraising, and underground payments.
The central bank called them a threat to financial security, arguing that their structure and circulation make enforcement hard. This mirrors previous concerns raised by senior Chinese policymakers, including a warning from former PBoC governor Zhou Xiaochuan earlier this year. In a closed-door seminar, Zhou said: “Be wary of the risk of stablecoins being overused for asset speculation, as a deviation in direction could trigger fraud and instability in the financial system.”
Although China bans crypto trading and mining on the mainland, stablecoin usage through offshore platforms has persisted. Authorities appear focused on limiting these channels, especially where payments or asset transfers bypass capital-control rules.
How Does Hong Kong Fit Into the Picture?
The regulatory split between mainland China and Hong Kong remains one of the most closely watched developments in the region. While Beijing continues to enforce its nationwide ban, Hong Kong has pursued a licensing regime for platforms and stablecoin issuers. Its model has drawn global firms and has been viewed as a controlled testing ground for digital-asset regulation.
However, Beijing has recently tightened supervision over Hong Kong’s more open framework. In September, mainland authorities told several major brokerages to pause projects. In October, officials moved to stop some Chinese tech companies from issuing their own stablecoins in the city, according to earlier reports.
The PBoC’s latest comments suggest that any digital-asset activity connected to mainland firms or users—even through Hong Kong—will face added pressure.
Investor Takeaway
Where Does the Digital Yuan Fit Into China’s Strategy?
While China keeps private digital assets outside the formal financial system, the government continues to expand the digital yuan project. More than 225 million personal wallets have been opened since the pilot began, and trials now include public-sector payments, transport networks and retail integrations.
The contrast is deliberate: private crypto is restricted, but is promoted as the sanctioned alternative for digital payments and programmable money. Friday’s message reinforces that distinction and points to a regulatory approach where the digital yuan fills the space private tokens are not permitted to occupy.
What Comes Next?
China’s stance leaves little room for change in the near term. Authorities show no sign of easing the ban, and stablecoins are now described in security terms rather than consumer-risk or market-risk language. Any remaining crypto activity routed through offshore platforms or intermediaries is likely to come under closer examination.
The most immediate impact falls on firms trying to operate between and mainland expectations. Beijing’s signals suggest that even legally licensed activity in Hong Kong may face constraints if it involves Chinese users, Chinese companies or cross-border token flows.
As other global jurisdictions experiment with regulated stablecoin frameworks, China continues to draw a firm line: private digital assets stay outside the financial system, while the digital yuan advances within it.
