Recently, a fairly noteworthy development has attracted attention. The People’s Bank of China recently convened a meeting with 13 departments, including the Public Security Bureau, the Cyberspace Administration, and the Financial Office, to reiterate that it will resolutely crack down on virtual currency trading speculation. The firmness of the stance is arguably the most weighty statement since the comprehensive ban in 2021.

When it comes to China’s cryptocurrency policy, in fact a comprehensive ban on trading was already imposed in 2017, and by 2021, even mining was prohibited. Over these years, various ministries have continued to rectify related disorder and chaos, and the effects have been quite clear. However, a new situation has emerged recently—there are signs that virtual currency speculative hype is on the rise, and illegal criminal activities also occur from time to time, presenting new challenges for regulatory authorities.

This meeting specifically singled out stablecoins. The central bank believes that stablecoins carry significant risks—for example, they cannot effectively meet customer identification and anti-money laundering requirements, and they are easily used for money laundering, scams, and illegal cross-border fund transfers. This also explains why the policy stance is so firm.

What’s interesting is that across the border in Hong Kong, over the past two years it has been actively promoting the development of the cryptocurrency industry, establishing licensing regimes for exchanges and stablecoins, and even attracting major companies such as Ant Group and JD.com to intend to issue offshore Renminbi stablecoins. But after the People’s Bank of China and the Cyberspace Administration clearly required that they “should not continue to advance” these efforts, all such plans were temporarily put on hold.

Looking at the overall situation, China’s stance toward cryptocurrencies is clear, and a change is unlikely in the short term. Regulatory authorities will continue to strengthen information-sharing and monitoring capabilities, and severely crack down on illegal criminal activity. For this market, understanding and respecting the policy bottom line remains the most important thing.