The People’s Bank of China has confirmed its previous ban on cryptocurrencies, mentioning that trading activities have begun re-emerging and they intend to increase their efforts against stablecoins.
China’s central bank has flagged stablecoins as a risk and has promised to refresh its crackdown on crypto trading, which it has banned since 2021.
The People’s Bank of China stated on Saturday, after a meeting with 12 other agencies, that “virtual currency speculation has resurfaced” due to various factors, posing new challenges for risk control.
“Virtual currency-related business activities constitute illegal financial activities.”
The bank emphasized that:
“Virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market.”
China’s central bank initiated the crypto ban in 2021, citing the need to curb crime and declaring that crypto posed a risk to the financial system.
Central Bank Concerns about Stablecoins
The central bank specifically pointed to stablecoins, indicating that they were not meeting legal requirements and were potentially being used for criminal pursuits.
“Stablecoins are a form of virtual currency, and currently cannot effectively meet requirements for customer identification and Anti-Money Laundering, posing a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers,” the bank said.
The People’s Bank of China
The People’s Bank of China, headquartered in Beijing, raised concerns about stablecoins at an inter-agency meeting on Saturday.
Source: Wikimedia
The bank committed to continually cracking down on illegal financial activities linked to cryptocurrencies to ensure economic stability.
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The gathering of the 13 agencies that attended the meeting resolved to enhance collaboration and information sharing to track down crypto users more effectively.
Reuters reported that China held the third-highest share of Bitcoin mining, accounting for 14% of the market share by the end of October.
In August, Chinese financial regulators instructed brokers to halt the promotion of stablecoin research, citing concerns of potential misuse for fraudulent activities.
Meanwhile, in July, Hong Kong began licensing stablecoin issuers, although some tech firms temporarily paused their plans due to interventions from Chinese regulators.
