China reiterates full prohibition on virtual assets
On November 28, China’s central bank (PBOC) held a coordination meeting and repeated its long-standing stance that virtual assets do not carry the same legal status as fiat currency. The bank emphasized that digital tokens are not legal tender and must not be used in any form of market circulation.
According to the statement, business activities involving virtual assets continue to be classified as illegal financial activity under Chinese law.
Stablecoins flagged as high-risk instruments
The PBOC specifically highlighted stablecoins as a category of virtual assets that cannot currently meet China’s strict requirements for identity verification, anti-money-laundering controls, and transaction transparency.
Authorities argue that stablecoins present elevated risks in areas such as:
• money laundering
• fundraising fraud
• illicit cross-border capital transfers
The bank noted that these risks undermine financial security, especially in a tightly regulated monetary system.
Adherence to prohibitive policy will remain long-term
The meeting underscored that risk prevention and control will remain a permanent theme of China’s financial policy. As part of this approach, the PBOC confirmed it will continue enforcing its prohibitive stance on both virtual currencies and related business activities.
While China continues to advance its own central bank digital currency, the digital yuan, officials made clear that privately issued digital assets will not be permitted to compete with or parallel the official monetary system.
Broader implications
This latest statement signals that China’s regulatory approach toward cryptocurrencies is unlikely to soften in the near future. The reiteration of existing rules suggests the government remains focused on:
• financial system stability
• capital flow control
• prevention of speculative activity
• enforcement of digital asset restrictions
For global markets, the move reinforces China’s position as one of the strictest jurisdictions on crypto, particularly regarding stablecoins and decentralized financial activity.
