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 of the coordinated working mechanism to crack down on the trading and speculation of virtual currencies.

The meeting noted that in recent years, various units have earnestly implemented the decisions and deployments of the CPC Central Committee and the State Council, and, in accordance with the requirements of the “Notice on Further Preventing and Disposing of Risks of Virtual Currency Trading and Speculation” jointly released in 2021 by the People’s Bank of China and ten other departments, have resolutely cracked down on virtual currency trading and speculation, rectified disorderly practices in the virtual currency market, and achieved clear results. Recently, affected by multiple factors, speculative trading of virtual currencies has picked up again, and related illegal and criminal activities have occurred from time to time, with risk prevention and control facing new situations and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, do not have the attribute of being acceptable for settlement, and should not and cannot be used as money to circulate in the market. Business activities related to virtual currencies are illegal financial activities.

It is understood that this is the first time the central bank has publicly defined 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. There are risks that stablecoins may be used for illegal activities such as money laundering, fraud involving fundraising, and improper cross-border transfer of funds.

The meeting called for making risk prevention and control an eternal theme of financial work, continuing to adhere to the prohibitive policy on virtual currencies, and sustaining crackdowns on illegal financial activities related to virtual currencies. All units should deepen coordinated collaboration, 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 safety of people’s property, and maintain stable economic and financial order.

It is understood that relevant officials from the Ministry of Public Security, the Cyberspace Administration of China, the Central Financial Commission 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)

Keywords:

                                                            Stablecoin