The People’s Bank of China announced it convened a meeting of several Chinese agencies to combat speculation in cryptocurrencies, and especially stablecoins. Most of China’s justice and legal agencies were involved alongside the regulators for markets, securities and foreign exchange. The key message is that there is no change in stance on cryptocurrencies and stablecoins, so the crackdown announced in 2021 is still in force and inter-agency coordination should be enhanced.
“Virtual currency-related business activities constitute illegal financial activities,” according to the central bank statement. “Stablecoins are a form of virtual currency, and currently cannot effectively meet requirements for customer identification and anti-money laundering, posing a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross border fund transfers.”
With Hong Kong passing stablecoin laws, it was widely seen as a baby step on behalf of mainland China. This latest statement puts that interpretation in doubt and follows the October news that Chinese firms such as JD.com and Ant had shelved their stablecoin issuance plans. An Ant International subsidiary received approval for a stablecoin in Europe but emphasized that it was only for usage between affiliates, not for retail purposes. In an earlier article about that news, some of the strategic angles were explored in depth.
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