China Reaffirms Harsh Anti-Crypto Policy as Stablecoin Risks Highlighted

Mainland China has once again reinforced its strict anti-cryptocurrency policy, pledging to escalate efforts against speculative activity in virtual assets, according to a report published by China Daily.

During an inter-agency meeting on Friday, officials from the People’s Bank of China (PBOC), the Ministry of Public Security, the Central Cyberspace Affairs Commission, and multiple other government bodies reiterated that virtual currencies do not possess legal status as fiat money and cannot be used as a medium of exchange. As such, all related business activities—including trading, financing, and service provision—continue to be classified as illegal financial operations.

Authorities also warned of a recent rise in speculative crypto trading, describing it as a growing source of financial instability and systemic risk.

China has maintained a firm anti-crypto stance for years, cracking down on both mining and trading. Yet, despite these restrictions, the country has unexpectedly resurfaced as the world’s third-largest Bitcoin mining hub, illustrating the resilience of underground mining operations.

During the meeting, the PBOC singled out stablecoins as a particular risk category. Officials argued that fiat-pegged tokens often lack robust customer identification mechanisms and anti-money-laundering safeguards, making them vulnerable to money laundering, illegal cross-border capital flows, and fraud. These warnings stand in stark contrast to the United States, where policymakers have recently moved toward more supportive and structured stablecoin regulations.

Although mainland China maintains a prohibitive environment, Hong Kong continues to take a divergent path. As a semi-autonomous region with its own legal and financial system, Hong Kong has embraced digital asset innovation. Stablecoins featured prominently during Hong Kong Fintech Week, and Financial Secretary Paul Chan even served as a keynote speaker at CoinDesk’s Consensus conference, signaling the region’s intention to position itself as a leading global hub for regulated crypto activity.

Reference: Coin Desk