Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities.

Securities Times Reporter He Jueyuan

The People’s Bank of China recently held a coordination meeting on cracking down on virtual currency trading speculation. Responsible officials from 13 departments, including the Ministry of Public Security and the Cyberspace Administration of China, attended the meeting. The meeting required that the prohibition policy on virtual currencies be firmly upheld and that illegal financial activities related to virtual currencies be continuously cracked down on.

The meeting pointed out that in recent years, in accordance with the requirements of the “Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation” jointly issued by the People’s Bank of China and ten other departments in 2021, various units have resolutely cracked down on virtual currency trading speculation and rectified disorder in the virtual currency market, achieving obvious results. Recently, affected by multiple factors, speculative trading of virtual currencies has seen a resurgence, and related illegal and criminal activities have occurred from time to time. Risk prevention and control faces a new situation and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, are not considered legal tender, and should not and cannot be circulated and used as currency in the market. Business activities related to virtual currencies are illegal financial activities. Stablecoins are a form of virtual currency. At present, they cannot effectively meet requirements such as customer identity verification and anti-money laundering, and there are risks that they may be used for illegal activities such as money laundering, fraud involving fundraising, and improper cross-border transfer of funds.

The meeting required that all units treat risk prevention and control as an eternal theme of financial work, continue to adhere to the prohibition policy on virtual currencies, and persistently crack down on illegal financial activities related to virtual currencies. All units should deepen coordination and cooperation, improve regulatory policies and legal bases, focus on key links such as information flow and capital flow, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the safety of people’s property, and maintain stability in the economic and financial order.

In recent years, virtual currencies issued by market institutions—especially stablecoins—have continued to emerge, but overall they are still in the early stages of development. Financial management departments such as international financial organizations and central banks generally adopt a cautious attitude toward the development of stablecoins. In a report titled “Next Generation Money and Financial Systems” released by the Bank for International Settlements (BIS) in June this year, it has clearly expressed concern about stablecoin risks. The report points out that stablecoins show some prospects in tokenization, but in the three key tests of uniqueness, resilience, and integrity, they still have not met the requirements to become a pillar of the monetary system. The report holds that what role stablecoins will play in future monetary systems remains to be observed.

Since this year, financial regulatory departments in various places in China have noticed that some illegal institutions, under the guise of “financial innovation,” “digital currency,” “digital assets,” and “blockchain technology,” have been absorbing funds by issuing or speculating on investment projects that use new concepts as gimmicks, promising high returns, and inducing members of the public to participate in trading speculation. Currently, many financial regulatory departments in various places or industry self-regulatory organizations have already issued risk warnings, emphasizing that stablecoins are not tools for investment or speculation.

Previously, Pan Gongsheng, Governor of the People’s Bank of China, said at the 2025 Financial Street Forum that the central bank will work with law enforcement departments to continue cracking down on the operation and speculation of virtual currencies within China, and to maintain economic and financial order. At the same time, it will closely track and dynamically assess the development of stablecoins overseas.

(Editor: Wen Jing)

Keywords:

                                                            Virtual Currency