China’s central bank is stepping up oversight after detecting a renewed rise in cryptocurrency trading activity.
According to China Daily, the People’s Bank of China (PBoC) has reaffirmed its stance against digital assets, issuing a warning about the reappearance of trading activity and announcing stricter measures targeting stablecoins.
On 28 November, the country’s central banking institution stated—following a meeting with 12 other government authorities—that speculative activities involving digital assets have resurfaced. For the central bank, this trend poses new challenges to risk management within the national financial system.
In its official statement, the bank firmly reiterated that digital assets do not share the same legal status as traditional currencies, are not legal tender, and cannot be used as a means of payment in the market. Any commercial activity related to cryptocurrencies is classified as illegal financial activity.
China’s cryptocurrency ban has been in place since 2021, when the central bank prohibited both trading and mining. The reasons given at the time included the need to combat criminal activity and concerns that digital assets could threaten the stability of the national financial system.
Stablecoins under scrutiny
Chinese authorities have identified stablecoins as a particular concern within the broader ban. According to the central bank, these tokens do not meet the necessary legal requirements and are often exploited for illicit activities.
The institution noted that while stablecoins are a form of virtual currency, they currently fail to meet adequate standards for customer identification and anti-money-laundering regulations. This, in the PBoC’s view, makes them vulnerable to illegal use, such as money laundering, fraudulent fundraising schemes, and unauthorized cross-border transfers.
Last August, Chinese financial regulators instructed brokers to cancel seminars and halt the promotion of research on stablecoins, citing the risk that they could be used as tools for fraudulent activities.
Coordination among agencies
The central bank announced it will intensify its crackdown on illegal financial activities linked to cryptocurrencies in order to safeguard the stability of the country’s economic and financial order.
The 13 agencies present at the meeting agreed to strengthen coordination and cooperation in identifying cryptocurrency users, through enhanced information sharing and improved monitoring capabilities.
Despite the ban, recent data indicates that China still maintains a significant presence in bitcoin mining activity. According to Reuters, the country holds the third-largest share of global mining, with a market share of 14% as of late October.
