China’s central bank has doubled down on its long-standing prohibition of digital asset operations, underscoring that any activity involving virtual currencies remains illegal in the country. Following a meeting last Friday, the People’s Bank of China (PBoC) also highlighted heightened risks tied to stablecoins, signalling that the regulatory stance is unlikely to soften.

Virtual currencies remain illegal financial activities

In its statement, the PBoC reiterated that virtual currencies do not hold the same legal status as fiat money and therefore “should not and cannot be used as currency in the market.” The bank emphasized that all business activities related to cryptocurrency are considered illegal financial activities.

Stablecoins under increased scrutiny

The PBoC further warned that stablecoins fail to meet key standards, including customer verification and anti-money-laundering requirements. These gaps create “significant risks of being used for money laundering, fundraising fraud, or illegal cross-border transfers,” the central bank noted.

Strong enforcement despite global regulatory shifts

Authorities insisted they will continue tightening oversight to prevent financial risks and ensure strict compliance with existing bans. The stance comes at a time when other major jurisdictions — from the United States to the EU — are moving toward regulated integration of digital assets into mainstream finance.

China, meanwhile, maintains its comprehensive ban in place since 2021, which covers trading as well as the mining of bitcoin and other cryptocurrencies. Despite this, the underground market persists. Reports, including from Yahoo! Finance, suggest that Chinese traders still access markets through OTC vendors and Telegram groups operating from neighbouring countries such as South Korea and Japan.

Bitcoin mining rebounds despite ban

Although mining was outlawed in 2021, China has re-emerged as a major bitcoin mining hub. The country currently ranks third globally by hash rate, behind the United States and Russia. After dropping to zero in 2021, China’s share has rebounded to more than 14% this year.

Focus remains on developing the digital yuan

While global markets lean into regulated blockchain integrations, Beijing continues pushing its central bank digital currency, the e-CNY. Pilot programmes for the digital yuan are expanding across cities and public-sector payment systems, marking China’s preferred path for digital finance.

Sources:

https://www.nbd.com.cn/articles/2025-11-29/4161822.html

https://finance.yahoo.com/news/china-doubles-down-crypto-ban-180727521.html

https://finance.yahoo.com/news/experts-doubt-china-lift-bitcoin-093000069.html

https://www.theblock.co/post/380811/chinas-central-bank-reaffirms-crypto-ban-flags-stablecoin-risks-following-multi-agency-meeting