The central bank and other departments have for the first time publicly set the tone, reaffirming their continued adherence to 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 crack down on the trading and speculation of virtual currencies.

The meeting noted that in recent years, all relevant units have earnestly implemented the decisions and arrangements of the Party Central Committee and the State Council, and, in accordance with the requirements of the “Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation” jointly issued in 2021 by the People’s Bank of China and ten other departments, have firmly cracked down on virtual currency trading and speculation, rectified chaos in the virtual currency market, and achieved clear results. Recently, affected by multiple factors, speculation and hype around virtual currencies have rebounded somewhat, related illegal and criminal activities have occurred from time to time, and risk prevention and control faces new circumstances and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, do not have the property of being a means of payment, and should not and cannot be used as currency to circulate in the market. Business activities related to virtual currencies fall under illegal financial activities.

It is understood that this is the first time the central bank has publicly set the tone for stablecoins. The meeting stated that 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 unlawful cross-border transfers of funds.

The meeting called for making risk prevention and control an enduring theme of financial work, continuing to uphold the prohibitive policy toward virtual currencies, and steadily cracking down on related illegal financial activities involving virtual currencies. All units should deepen coordinated cooperation, improve regulatory policies and legal bases, focus on key areas such as information flows and capital flows, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the property safety of the people, and maintain stable economic and financial order.

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

(Editor: Wen Jing)

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                                                            Stablecoin