China's PBoC: "All virtual asset-related activities are entirely illegal... Stablecoins are a threat to financial security"

China's central bank, the People's Bank of China (PBoC), reaffirmed its previous position that virtual asset (cryptocurrency)-related activities are all illegal, and issued a strong warning particularly about the use of stablecoins.

On the 30th (local time), The Block reported that in a statement released after a joint meeting involving 13 government departments, the PBoC emphasized, "Virtual assets do not have the same legal status as legal tender, and because they lack the status of legal currency, they should not be used as currency in the market." It added, "We will crack down strongly on illegal and criminal activities."

The remarks came in response to an internal assessment that speculative activity in virtual assets is 'resurging' in China; the PBoC said the comprehensive ban on virtual asset trading and mining implemented in September 2021 "rectified market disorder and achieved meaningful results." This is interpreted as the toughest official commentary since the virtual asset ban.

Stablecoins were singled out for a separate warning. The PBoC said, "Stablecoins do not meet customer identification (KYC) and anti-money laundering (AML) standards, and they create risks such as money laundering, illegal fundraising, illegal cross-border remittances, and underground payments. This is a threat to national financial security," suggesting it will further strengthen enforcement in the future.