China’s central bank has once again made its position clear. Virtual assets, including stablecoins, remain illegal as payment tools in the country. The People’s Bank of China, or PBOC, reaffirmed this stance during a high-level coordination meeting held on November 28.
China Central Bank Reaffirms Ban on Stablecoins and Crypto Payments
China’s central bank has reiterated that digital assets do not carry the same legal status as traditional currency and, therefore, cannot be used for circulation in domestic markets. Officials emphasized that all business activities involving cryptocurrencies are considered illegal financial operations. The People’s Bank of China (PBOC) also stated that stablecoins fail to meet key regulatory requirements, including Know Your Customer (KYC) protocols and stringent anti-money laundering (AML) controls. As a result, the bank views stablecoins as a growing threat to financial stability.
Authorities Highlight Rising Illegal Crypto Activity
The renewed warning comes amid a surge in virtual currency speculation. According to the PBOC, illegal trading and criminal activity tied to crypto assets have risen in recent months. A high-level meeting convened more than a dozen major agencies, including the Ministry of Public Security, the Supreme People’s Court, the securities regulator, and the foreign exchange authority, all of which agreed that regulatory pressure must remain high.
Officials noted that prior crackdowns following the 2021 joint ban had been effective. Yet new challenges have emerged due to evolving market conditions and cross-border risks. The PBOC linked crypto-related activities to money laundering, fraud, illegal fundraising, and underground cross-border fund transfers. As such, law enforcement cooperation remains a top priority.
Stablecoins Seen as a Growing Financial Risk
PBOC Governor Pan Gongsheng issued strong warnings regarding stablecoins, noting that these assets could exacerbate vulnerabilities in the global financial system. While stablecoins are still in an early stage of development, their rapid growth introduces serious risks, including inadequate customer identification and weak anti-money laundering protections.
Pan also highlighted the potential for stablecoins to facilitate unapproved outbound capital flows, raising the risk of capital flight and illegal foreign exchange activity. To counter this, China continues to monitor foreign stablecoin projects closely. Earlier this year, the country’s foreign exchange regulator instructed banks to flag suspicious overseas transfers linked to crypto, aiming to close loopholes that could bypass strict currency controls.
Ban Remains Firm as China Promotes the Digital Yuan
China has progressively banned crypto trading, exchanges, and mining since 2017, a stance that remains in place in 2025. Officials continue to frame private digital assets as threats to financial order while simultaneously advancing the state-backed digital yuan (e-CNY) as a safer, fully regulated alternative for digital payments.
Chinese courts have clarified a key distinction: although cryptocurrencies cannot serve as money, individuals may legally own them. A 2023 court report confirmed that private ownership of digital assets is protected, even if their use as currency is prohibited.
With global demand for stablecoins growing, China’s position sharply contrasts with other regions exploring new regulatory frameworks. For Beijing, the message is clear: digital coins may thrive elsewhere, but within mainland China, the door remains firmly closed.
