The People's Bank of China strikes again hard against virtual currencies, with multiple departments jointly strengthening regulatory measures

Virtual currency risk management has once again become a key focus for Chinese regulators. Recently, the People’s Bank of China (PBOC) jointly held a coordination meeting with multiple government departments regarding virtual currency trading speculation, reaffirming a firm stance on this sector. This policy statement is regarded by the industry as the most significant public declaration since the 2021全面 ban on cryptocurrency mining.

PBOC and 13 Departments Collaborate, Regulatory Efforts Reach New Heights

At the end of November, the People’s Bank of China convened the “Coordination Mechanism Meeting to Combat Virtual Currency Trading Speculation,” gathering representatives from 13 government departments including the Ministry of Public Security, the Central Cyberspace Administration, the Central Financial Work Office, and the Supreme People’s Court. This lineup clearly demonstrates China’s determination to regulate virtual currencies.

According to the PBOC’s statement, China had already issued a comprehensive ban on cryptocurrency trading as early as 2017, and in 2021, further policies were introduced to fully prohibit cryptocurrency mining. Over the years, various ministries have achieved notable results in cracking down on virtual currency trading speculation, effectively rectifying related chaos. However, recently, due to multiple factors, virtual currency speculation has resurged, with illegal activities occurring from time to time, posing new challenges to financial risk prevention and control.

Stablecoins Become Regulatory Focus, Money Laundering Risks Raise Alerts

During this coordination meeting, stablecoins were identified as a key concern. The People’s Bank of China explicitly pointed out that stablecoins have multiple regulatory loopholes. First, stablecoins “cannot effectively meet requirements for customer identification, anti-money laundering, and other aspects,” directly threatening the security of the financial system.

More notably, stablecoins are susceptible to being used for money laundering, fundraising scams, illegal cross-border fund transfers, and other illicit activities. These hidden risks turn the virtual currency ecosystem into a breeding ground for criminals, endangering people’s property safety and the order of the economy and finance. The central bank emphasized that all units will continue to crack down on illegal financial activities related to virtual currencies, strengthen information sharing, further enhance monitoring capabilities, and severely combat illegal criminal activities.

Hong Kong Takes a Different Approach, Contrasting with Mainland China Policies

Interestingly, while China maintains a strict ban on virtual currencies, Hong Kong has adopted a completely different strategy over the past two years. Hong Kong actively promotes the development of the cryptocurrency industry, establishing licensing systems for exchanges and stablecoin issuers, attracting many international companies to set up operations.

This open attitude has also attracted Chinese mainland tech giants. Ant Group and JD.com have expressed interest in issuing “offshore RMB” stablecoins in Hong Kong, attempting to expand their businesses. However, after the People’s Bank of China and the Cyberspace Administration explicitly stated that “further promotion is not allowed,” these two companies have currently paused their related stablecoin plans.

This regulatory “braking” fully reflects China’s policy orientation on virtual currencies. Whether companies are based in mainland China or Hong Kong, they must adhere to the policies set by the People’s Bank of China. China’s commitment to preventing virtual currency risks remains unchanged by regional boundaries, and this consistent stance provides strong guarantees for the stability of financial order.