China has once again reiterated its nationwide cryptocurrency ban after regulators noticed a resurgence in trading activity and rising interest in stablecoins. The People’s Bank of China (PBOC) said it will intensify its crackdown on virtual assets, emphasizing that stablecoins remain a growing risk to the country’s financial system.
Crypto Trading Resurfaces Despite 2021 Ban
The PBOC announced the renewed warning following a joint meeting with 12 other government agencies. According to the statement, virtual currency speculation has resurfaced due to multiple external factors, creating new challenges for financial risk control.
The central bank stressed that digital assets do not carry the legal status of fiat money and cannot be used as currency within China’s market. It reiterated that any business activity related to virtual currencies is considered illegal financial activity under national regulations.
China originally banned cryptocurrency trading and mining in 2021 to limit financial crime, curb capital flight, and shield its financial system from volatility associated with digital assets.
Stablecoins Flagged as a Growing Risk
Chinese regulators highlighted stablecoins as an area of particular concern, claiming these tokens fail to meet legal requirements for customer identification and Anti-Money Laundering standards. Authorities warned that stablecoins could be used for illegal activities such as money laundering, fraudulent fundraising schemes, and unauthorized cross-border fund transfers.
Regulators said they will continue to crack down on crypto-related transactions to preserve economic and financial stability. The 13 agencies involved also committed to strengthening cooperation, improving information sharing, and enhancing monitoring tools to track crypto users more effectively.
China’s Role in Bitcoin Mining
Despite the ban, activity linked to digital assets persists. Reuters recently reported that China held the world’s third-highest share of Bitcoin mining by the end of October, with an estimated 14% of global mining power located in the country.
Earlier this year, financial regulators reportedly instructed brokers to cancel seminars and stop promoting research related to stablecoins due to concerns the assets could facilitate fraudulent activity.
Hong Kong’s Different Approach
While mainland China continues to restrict cryptocurrencies, Hong Kong has moved in the opposite direction. In July, the region opened its licensing regime for stablecoin issuers as part of its push to become a regulated digital asset hub. However, several tech companies reportedly paused plans to launch stablecoins in Hong Kong after mainland Chinese regulators intervened.
China’s renewed warning signals that despite global momentum toward regulated digital assets, Beijing remains firmly committed to its zero-tolerance stance on cryptocurrency trading and stablecoins.
