Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities.

Securities Times reporter He Jueyuan

The People’s Bank of China recently held a meeting of the inter-agency coordination mechanism for combating the trading and speculation of virtual currencies. Representatives in charge from 13 departments, including the Ministry of Public Security and the Cyberspace Administration of China, attended the meeting. The meeting called for continued adherence to a prohibitive policy toward virtual currencies and sustained crackdowns on related illegal financial activities.

The meeting noted that in recent years, in accordance with the requirements of the “Notice on Further Preventing and Defusing Risks of Virtual Currency Trading and Speculation” jointly issued in 2021 by the PBOC and 10 other departments, relevant units have firmly cracked down on virtual currency trading and speculation, rectified chaotic practices in the virtual currency space, and achieved clear results. Recently, influenced by multiple factors, virtual currency speculation and hype have shown signs of picking up again, and related illegal and criminal activities have occurred from time to time, creating new situations and new challenges for risk prevention and control.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, do not have legal tender status, and therefore should not and cannot be used and circulated as currency in the market. Business activities related to virtual currencies are illegal financial activities. Stablecoins are a form of virtual currency. At present, they cannot effectively meet requirements in areas such as customer identity verification and anti–money laundering, and there are risks that they may be used for illegal activities such as money laundering, fundraising fraud, and improper cross-border transfer of funds.

This meeting requires that each unit treat risk prevention and control as an enduring theme of financial work. Units should continue to adhere to the prohibitive policy toward virtual currencies and sustain crackdowns on related illegal financial activities. Units should deepen coordination and cooperation, improve regulatory policies and legal bases, focus on key links such as information flows and capital flows, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the safety of people’s property, and maintain stable economic and financial order.

In recent years, virtual currencies issued by market institutions—especially stablecoins—have continued to emerge, but overall they are still in the early stage of development. Financial management departments such as international financial institutions and central banks generally hold a cautious attitude toward the development of stablecoins. In a report titled “The Next Generation of Money and Financial Systems” released by the Bank for International Settlements (BIS) in June of this year, concerns about stablecoin risks were clearly stated. The report pointed out that stablecoins show some promise in tokenization, but in the three key tests of singularity, elasticity, and integrity, they still have not met the requirements to become a pillar of the monetary system. The report believes that what role stablecoins will play in future monetary systems remains to be observed.

Since this year began, financial regulators in multiple regions in China have noticed that some illicit institutions, under names such as “financial innovation,” “digital currency,” “digital assets,” and “blockchain technology,” absorb funds through investment projects marketed with new concepts—by issuing or hyping such projects—and promise high returns to lure the public into trading and speculation. At present, financial regulators in multiple regions or industry self-regulatory organizations have already issued risk warnings, emphasizing that stablecoins are not tools for investment or speculation.

Earlier, Pan Gongsheng, governor of the People’s Bank of China, said at the 2025 Financial Street Forum that the PBOC will continue, together with law enforcement departments, to crack down on the operation and speculation of virtual currencies within China, and to maintain economic and financial order, while also closely tracking and dynamically assessing the development of stablecoins overseas.

(Editor: Wen Jing)

Keywords:

                                                            Virtual currency