The central bank and other departments publicly reaffirm the stance on stablecoins, continuing to uphold the ban on virtual currencies.

Source: Shanghai Securities News Author: Chang Peiqi

Recently, the People’s Bank of China held a meeting to coordinate efforts to combat virtual currency trading and speculation.

The meeting pointed out that in recent years, various units have conscientiously implemented the decisions and deployments of the Party Central Committee and the State Council. In accordance with the requirements of the “Notice on Further Preventing and Disposing of Virtual Currency Trading and Speculation Risks” jointly issued by the People’s Bank of China and ten other departments in 2021, they have resolutely cracked down on virtual currency trading and speculation, rectified chaos in the virtual currency market, and achieved significant results. Recently, influenced by multiple factors, virtual currency speculation has resurged, and related illegal activities have occurred from time to time, posing new challenges for risk prevention and control.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, are not legally enforceable, and should not and cannot circulate as currency in the market. Activities related to virtual currencies are considered illegal financial activities.

It is understood that this is the central bank’s first public clarification regarding stablecoins. The meeting pointed out that stablecoins are a form of virtual currency. Currently, they cannot effectively meet requirements such as customer identification and anti-money laundering, and pose risks of being used for money laundering, fundraising scams, and illegal cross-border fund transfers.

The meeting called for making risk prevention and control an eternal theme of financial work, continuing to uphold the ban on virtual currencies, and persistently cracking down on illegal financial activities related to virtual currencies. All units should deepen coordination, improve regulatory policies and legal basis, focus on key links such as information flow and capital flow, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal activities, protect people’s property safety, and maintain the stability of the economic and financial order.

It is understood that responsible officials from the Ministry of Public Security, Cyberspace Administration of China, China Banking and Insurance Regulatory Commission, Supreme People’s Court, Supreme People’s Procuratorate, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Justice, People’s Bank of China, State Administration for Market Regulation, State Financial Regulatory Administration, China Securities Regulatory Commission, and State Administration of Foreign Exchange attended the meeting.

(Edited by: Wen Jing)

Keywords: Stablecoin