China Central Bank Reaffirms Ban on Stablecoins and Crypto Payments

China’s central bank has once again made its position clear. Virtual assets, including stablecoins, remain illegal as payment tools in the country. The People’s Bank of China, or PBOC, reaffirmed this stance during a high-level coordination meeting held on November 28.

The central bank said digital assets do not have the same legal status as traditional currency. As a result, they cannot be used for circulation in markets. Officials also stressed that all business activities linked to cryptocurrencies fall under illegal financial operations. Moreover, the PBOC said stablecoins fail to meet key regulatory requirements. These include Know Your Customer rules and strict anti-money laundering controls. Because of this, the bank views stablecoins as a growing risk to financial stability.

Authorities Warn of Rising Illegal Crypto Activity

The latest warning comes as authorities see renewed heat in virtual currency speculation. According to the PBOC, illegal trading and criminal activity tied to crypto assets have increased again in recent months. The meeting brought together more than a dozen major agencies. These included the Ministry of Public Security, the Supreme People’s Court, the securities regulator and the foreign exchange authority. Together, they agreed that the pressure must stay high.

Officials said earlier crackdowns delivered strong results after the joint ban was introduced in 2021. However, they now face new challenges due to changing market conditions and new cross-border risks. The PBOC stressed that crypto-related activities often appear in money laundering cases. It also linked them to fraud, illegal fundraising and underground fund transfers across borders. Because of this, the bank said law enforcement cooperation will remain a top priority.

Stablecoins Called a Growing Financial Threat

PBOC Governor Pan Gongsheng also took a firm tone on stablecoins. He warned that these assets amplify weaknesses in the global financial system rather than reduce them. Pan said stablecoins still sit in an early development stage. Yet their fast growth brings serious side effects. He pointed to failures in customer identification and weak anti-money laundering protection.

He also warned that stablecoins can help move money out of the country without approval. This increases the risk of capital flight and illegal foreign exchange activity. As a result, China will continue to closely track foreign stablecoin projects. Earlier this year, China’s foreign exchange regulator ordered banks to flag suspicious overseas transfers linked to crypto. That move aimed to close loopholes used to bypass strict currency controls.

Ban Stays Firm as China Pushes Its Digital Yuan

China has banned crypto trading, exchanges and mining in stages since 2017. This policy remains unchanged in 2025. Officials continue to frame private digital assets as a threat to financial order. At the same time, China pushes forward with its own state backed digital yuan, known as the e-CNY. The government promotes it as a safer and fully regulated alternative for digital payments.

However, Chinese courts have drawn a key distinction. While crypto cannot function as money, individuals can still hold digital assets as legal property. A court report in 2023 confirmed this protection. In short, citizens may own crypto. But they cannot use it as currency. With stablecoin demand rising worldwide, China’s stance now stands in sharp contrast to other regions. While many countries explore new crypto rules, Beijing continues to enforce zero tolerance. Currently, the message from the PBOC is simple. Digital coins may grow elsewhere. But within mainland China, the door remains firmly shut.