China plans stricter crypto rules as PBOC leads talks to curb stablecoin use and revive enforcement after 2021 ban.
China is reinforcing its tough stance on digital assets as new policy talks point to upcoming enforcement against stablecoin and crypto payments. Authorities have raised concerns over the rise in illegal financial activities tied to virtual currencies. This move follows fresh efforts by regulators to coordinate and monitor the financial system more closely.
Regulatory Agencies Meet to Discuss New Enforcement Measures
The People’s Bank of China (PBOC) recently held talks with multiple state agencies to address growing concerns about crypto activity. Officials from the Ministry of Public Security, the Cyberspace Administration, and other departments were present. They focused on designing a new approach to handle virtual currency-related risks.
Authorities stated that trading and speculation had returned despite the 2021 nationwide ban. They said that new types of fraud and cross-border payments involving stablecoins had surfaced. Officials believe these activities continue to pose challenges to the country’s financial security and legal system.
During the meeting, regulators emphasized that virtual assets are not recognized as legal tender. They warned that using them for payments or investments remains illegal under Chinese law. The central bank called for tighter control and enforcement moving forward.
Stablecoin Anonymity Draws Fresh Scrutiny
Officials raised new concerns about the use of stablecoins, especially regarding their anonymous nature and use in illegal transactions. They stated that stablecoins make it difficult to track users, which could enable scams and illegal fundraising schemes. Authorities are now prioritizing stronger identification systems for crypto-related transactions.
Regulators also discussed ways to improve inter-agency coordination to trace the movement of funds. They noted that better data sharing and technology use could support enforcement actions. Agencies are also preparing to monitor financial flows more closely through new digital tools.
Meanwhile, some companies in China are testing limited digital asset settlements. In one case, PetroChina explored using stablecoins for cross-border transactions. The company is monitoring developments in Hong Kong’s financial system to evaluate its potential benefits.
Related Reading: Bitcoin Mining Quietly Returns to China, Now 14% of Global Hashrate
China Keeps Cautious Approach to Digital Asset Innovation
China has continued to block expansion of digital asset services outside its borders. Earlier this year, the CSRC advised two Hong Kong firms to stop tokenization projects. This action shows that Beijing remains cautious even in overseas markets.
Authorities have also moved to use their own holdings, including a reported sale of 15,000 Bitcoins on offshore exchanges in April. The funds were reportedly used to support local government finances. This action suggests that authorities are closely managing their crypto exposure.
At the same time, China is exploring state-backed digital currency options. Reports suggest the country is considering allowing yuan-based stablecoins. This move could serve as a response to global stablecoin development led by the United States.
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