U.S. MSB Daily News
USMSB.com – China’s central bank has doubled down on its war against crypto, declaring once again that all virtual currency business is illegal finance and ordering regulators and law-enforcement agencies to intensify the crackdown.The PBOC statement also singled out stablecoins, explicitly labeling them a type of virtual currency.
On November 28, 2025, the People’s Bank of China (PBOC) convened a high-level “working coordination mechanism” meeting on striking virtual currency trading and speculation. Senior officials from a who’s-who of Chinese power agencies were at the table, including the Ministry of Public Security, Cyberspace Administration, Central Financial Office, Supreme People’s Court, Supreme People’s Procuratorate, NDRC, MIIT, Ministry of Justice, State Administration for Market Regulation, National Financial Regulatory Administration, CSRC, and SAFE.
Chinese officials said that since the 2021 joint notice on tackling virtual currency trading and speculation, authorities have “rectified the chaos” in the market and achieved “obvious results” by cracking down on trading platforms and related activities.
But Beijing now sees trouble returning.
Officials warned that, “due to multiple factors,” speculative trading in virtual currencies has picked up again, with related illegal and criminal activity “occurring from time to time” and creating new risks and new challenges for financial stability.
Crypto Is Not Money, Beijing Says
The meeting drove home Beijing’s hard line:
- Virtual currencies do not have the same legal status as legal tender.
- They do not have legal tender or mandatory acceptance status.
- They must not and cannot circulate as currency in the market.
- Business activities involving virtual currencies are deemed illegal financial activities.
In other words: in the eyes of Chinese regulators, crypto trading isn’t a gray zone—it’s flat-out off-limits.
Stablecoins in the Crosshairs
The PBOC statement also singled out stablecoins, explicitly labeling them a type of virtual currency and warning that:
- They cannot currently meet requirements on customer identification (KYC) and anti–money laundering (AML).
- They pose risks of being used for money laundering, fraudulent fundraising, and illegal cross-border fund transfers.
For Chinese regulators, stablecoins aren’t a safer, regulated bridge—they’re viewed as another door to capital flight and crime.
Political Line: Risk Control as the “Eternal Theme”
In classic Beijing fashion, the meeting tied its message directly to the top leadership.
Officials said they will:
- Be guided by “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”.
- Fully implement the decisions of the 20th Party Congress and subsequent plenums.
- Treat risk prevention and control as the “eternal theme” of financial work.
The policy bottom line: China will continue its prohibitive stance on virtual currencies and keep striking at crypto-related illegal finance with high pressure and high frequency.
Orders to Regulators and Police: Follow the Money and Data
The meeting instructed agencies across the system to:
- Deepen coordination and cooperation among ministries, regulators, and courts.
- Improve regulatory policies and legal bases for enforcement.
- Focus on key links such as information flows and fund flows.
- Strengthen information-sharing and monitoring capabilities across departments.
- “Severely crack down” on illegal and criminal activities in the virtual currency space.
- Protect the public’s property and safeguard economic and financial stability.
In practice, that means more pressure on on- and off-ramps, tech platforms, payment channels, and any intermediaries that might connect Chinese users to offshore crypto services.
Regulatory Takeaways for U.S. MSB Professionals
For readers of U.S. MSB Daily News—compliance officers, lawyers, and AML professionals—this renewed stance from Beijing signals:
- Zero tolerance, reaffirmed: China is not drifting toward a regulatory licensing model for crypto. It is reiterating a prohibition model, including for stablecoins.
- Heightened cross-border risk: Any flow touching Chinese persons, entities, or counterparties and involving virtual currency is likely to be treated as sensitive or high-risk by Chinese authorities.
- AML/KYC pressure points: Beijing’s public critique of stablecoins on KYC and AML grounds aligns with global themes—but with much harsher policy conclusions.
- Expect more enforcement headlines: The explicit call to “severely crack down” suggests more investigations, arrests, and platform shutdowns related to crypto activity involving China-linked users or channels.
For money services businesses and other regulated financial intermediaries, this development is another reminder that crypto-related activities involving China are firmly in the red zone from a PRC regulatory perspective, and should be treated as a heightened compliance, sanctions, and AML risk in internal policies and customer risk scoring.
U.S. MSB Daily News
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