Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities.

Securities Times reporter He Jueyuan

The People’s Bank of China recently convened a meeting of the interagency coordination mechanism to crack down on virtual-coin trading speculation. Officials in charge from 13 departments, including the Ministry of Public Security and the Cyberspace Administration of China’s central office, attended the meeting. The meeting called for continued adherence to the prohibitive policy toward virtual coins and sustained efforts to crack down on illegal financial activities related to virtual coins.

The meeting noted that in recent years, in accordance with the requirements of the “Notice on Further Preventing and Disposing of the Risks of Virtual-Coin Trading Speculation” jointly issued by 10 departments, including the PBOC, in 2021, relevant entities have resolutely cracked down on virtual-coin trading speculation, rectified disorderly practices in the virtual-coin market, and achieved clear results. Recently, due to multiple factors, virtual-coin speculation has shown some resurgence, and related违法犯罪 activities have occurred from time to time, presenting a new situation and new challenges for risk prevention and control.

The meeting emphasized that virtual coins do not have the same legal status as fiat currencies, do not have legal tender status, and should not and cannot be used as currency for circulation in the market. Businesses and activities related to virtual coins fall within the category of illegal financial activities. Stablecoins are a type of virtual coin. At present, they cannot effectively meet requirements such as customer identity verification and anti–money laundering. There is a risk that stablecoins may be used for illegal activities such as money laundering, fundraising fraud, and improper cross-border transfers of funds.

This meeting required that all units treat risk prevention and control as an enduring theme of financial work, continue to adhere to the prohibitive policy toward virtual coins, and sustain efforts to crack down on illegal financial activities related to virtual coins. All units should deepen coordinated cooperation, improve regulatory policies and legal bases, focus on key links such as the flow of information and the flow of funds, strengthen information sharing, further enhance monitoring capabilities, severely crack down on违法犯罪 activities, protect the safety of the people’s property, and maintain stable economic and financial order.

In recent years, virtual coins issued by market institutions—especially stablecoins—have continued to emerge, but overall they are still in an early stage of development. Financial regulators and financial management departments such as international financial institutions and central banks generally take a cautious attitude toward the development of stablecoins. In a report titled “The Next-Generation Monetary and Financial System” released by the Bank for International Settlements (BIS) in June of this year, concerns about the risks of stablecoins were explicitly expressed. It pointed out that stablecoins show some prospects in tokenization, but in the three key tests of single-issuance, resilience, and completeness, they still have not met the requirements to become a pillar of the monetary system. The report believes that what role stablecoins will play in future monetary systems remains to be seen.

Since this year began, financial regulators in multiple places in China have noticed that certain unlawful institutions, under the guise of “financial innovation,” “digital currency,” “digital assets,” “blockchain technology,” and other names, have been collecting funds through investment projects framed by newly coined concepts, by issuing or promoting such projects, and by promising high returns to induce the public to participate in trading and speculation. At present, financial regulators in multiple places or industry self-regulatory organizations have issued risk warnings, emphasizing that stablecoins are not tools for investment or speculation.

Previously, in the 2025 Financial Street Forum Annual Conference, PBOC Governor Pan Gongsheng said that the PBOC will continue, together with law-enforcement departments, to crack down on the operation and speculation of virtual coins within China, and to maintain economic and financial order, while closely tracking and dynamically assessing the development of stablecoins outside China.

(Editor: Wen Jing)

Keywords:

                                                            Virtual currency