PBOC Reiterates Hard Line on Virtual Currency Activities
TREE NEWS reports: The People’s Bank of China (PBOC) has issued a fresh public education notice reiterating that virtual currencies are not legal tender and must not circulate in the market. The central bank declared that all virtual currency-related business activities within mainland China are illegal financial activities, subject to strict prohibition and legal crackdown. It also explicitly prohibited overseas entities and individuals from providing virtual currency services to domestic subjects in any form, and banned the issuance of RMB-pegged stablecoins offshore without authorization.
Key Points of the Notice
- Virtual currencies lack legal tender status and cannot be used as currency in circulation.
- Domestic virtual currency business activities are illegal and will be strictly banned and shut down.
- Foreign entities may not provide virtual currency services to Chinese residents.
- Unauthorized offshore issuance of RMB-pegged stablecoins is prohibited.
- The public is warned against “guaranteed profits” and “high interest” crypto investment traps, and urged not to participate in mining, trading, or acting as over-the-counter brokers.
Industry Implications
This notice reinforces China’s long-standing anti-crypto stance, first codified in the 2021 blanket ban. However, the explicit mention of RMB-pegged stablecoins signals growing regulatory attention to offshore yuan-backed tokens, which have gained traction in cross-border trade and DeFi. The PBOC’s warning aims to prevent capital flight and preserve monetary sovereignty amid a global stablecoin boom. For crypto businesses, the message is clear: China remains a no-go zone for any virtual currency operations. Exchanges, wallet providers, and DeFi protocols targeting Chinese users face heightened legal risks. The notice may also chill innovation in Hong Kong’s licensed crypto sector, as mainland regulators assert their influence.
Forward-Looking Perspective
While the PBOC’s stance is not new, its reiteration during a period of global regulatory clarity—such as the EU’s MiCA and Hong Kong’s licensing regime—highlights China’s isolationist approach. The focus on RMB stablecoins suggests Beijing is monitoring offshore yuan usage in DeFi and may pursue cross-border enforcement. Market participants should expect continued pressure on OTC desks and underground mining. Meanwhile, China’s digital yuan (e-CNY) remains the only sanctioned digital currency, and its adoption may accelerate as a controlled alternative. The notice serves as a reminder that China’s crypto crackdown is far from over, and any entity facilitating access for Chinese users does so at its own peril.
