China maintains crackdown on illegal virtual currency-related financial activities

BEIJING -- The People's Bank of China, China's central bank, stated that the country will maintain prohibitive policies regarding virtual currency trading and will continue to crack down on related illegal financial activities in an effort to safeguard the security of people's property.

The bank sent this message at a recent meeting on virtual currency speculation crackdown. The meeting warned of a resurgence of speculative trading and criminal activities linked to virtual currencies, as well as the new challenges this poses to financial risk prevention.

The meeting reiterated that virtual currencies do not possess the same legal status as fiat currency, lack legal tender status, and must not be circulated or used in the market as currency. It noted that all virtual currency-related business activities are considered illegal financial operations.

Regarding stablecoins, the meeting emphasized that stablecoins currently fail to meet requirements for customer identification and anti-money laundering controls. As a result, they carry risks of being used in money laundering, fundraising fraud, illegal cross-border fund transfers, and other illicit activities.

The meeting has called for enhanced inter-agency coordination, improved regulatory policies and legal frameworks, and strengthened monitoring of information and capital flows.

It also urged efforts to increase information sharing and improve surveillance capabilities so as to maintain the order and stability of the economic and financial system.