China’s Central Bank Renews Crackdown on Crypto and Stablecoins

Highlights:

• China’s central bank has reaffirmed the stablecoin ban to prevent financial crime.
• New measures target crypto speculation and capital outflow.
• Officials stress risks of using virtual currencies as market payments.

A high-level meeting on November 28 saw China’s central bank issue a statement against virtual currency activity. Key government agencies were hosted by the People’s Bank of China (PBOC) to address the resurgence of cryptocurrency speculation. Authorities cited increasing concerns about crypto-related crimes and market risks.

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PBOC emphasized that virtual currencies are not legally recognized in the country. Thus, they are not allowed to circulate as currency or a means of payment. China had already prohibited crypto trading and mining, yet increased activity led to a new move. Authorities are now seeking to tighten their belts and seal loopholes.

Stablecoins Identified as Key Risk Factor

At the meeting, special attention was paid to the scrutiny of stablecoins. The PBOC noted that the stablecoins do not comply with the necessary anti-money laundering rules. Authorities also raised the concern of inadequate customer identification and user anonymity. These loopholes expose them to unlawful utilization, such as money laundering and fraud.

According to Governor Pan Gongsheng, stablecoins are at the nascent phase of development. However, their high rate of development is a threat to financial sustainability. He cautioned that these assets were capable of shifting money out of China without approval. Furthermore, this is a breach of capital controls and heightened financial risk.

On Nov. 28, China’s central bank (PBOC) convened a coordination meeting and reiterated that: Virtual assets do not have the same legal status as fiat, are not legal tender, and must not be used as currency in market circulation; related business activities constitute illegal…

— Wu Blockchain (@WuBlockchain) November 29, 2025

Chinese regulators stated that illegal fundraising and international fund transfers can also be facilitated by stablecoins. Consequently, authorities will keep overseeing projects based on stablecoins abroad and increase control mechanisms. These digital assets are subject to legal action and are still illegal in the domain of domestic activity.

Hong Kong, operating under different legislation, presented a stablecoin framework in August. It has not, however, issued any licenses.

Crypto Speculation Resurfaces Despite Earlier Crackdowns

Authorities noted that speculative trading in digital currencies has been rising in the past few months. Emerging technologies and changes in the global markets have enhanced this. PBOC affirmed that crypto platforms were at the center of several fraud cases recently. A number of law enforcement officials from various agencies joined the meeting in order to organize more decisive action.

China’s central bank referred to all business activities related to virtual currency as unlawful financing activities. Although digital assets are available as property to Chinese citizens, they are not allowed to participate in the marketplace. Bitcoin and other cryptocurrencies are still prohibited from being transacted, exchanged, or invested in China.

Despite the crackdown, crypto mining has been seen to resurface in certain energy-rich regions. Roughly 14% of the world’s Bitcoin mining is taking place in China. This growth is of concern to the authorities, who had already prohibited mining in 2021 based on energy and financial issues.

Reuters reports that Bitcoin mining has quietly resurged in China despite the 2021 ban, with the country now contributing about 14% of global hashrate, ranking third worldwide. Miners have re-emerged in low-cost, energy-surplus regions like Xinjiang and Sichuan, where new…

— Wu Blockchain (@WuBlockchain) November 24, 2025

Cross-Agency Push for Stronger Oversight and Coordination

The PBOC called for a closer collaboration among government departments. These include the Ministry of Public Security, the State Financial Regulatory Commission, and the China Securities Regulatory Commission. Authorities furthermore promised to enhance law enforcement and rules to regulate the use of digital finance.

The authorities also promised to have better information sharing and increase surveillance of capital and data flows. The coordinated push will aim at strategic entry points of digital assets into the financial system. Officials emphasized the necessity to safeguard the public property and maintain financial stability.

China is developing its own central bank digital currency, the digital yuan, or e-CNY. The state-backed cryptocurrency is considered a secure and fully regulated alternative to private cryptocurrencies. Meanwhile, the crypto and stablecoin ban in the country remains unchanged.

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