China Tightens Virtual Currency Rules After the 1128 Meeting, Targeting USDT Stablecoin to Curb Cross-Border Money Laundering

On November 28, the People’s Bank of China (PBOC), joined by more than ten government departments, held the 1128 Meeting to reinforce measures against speculation in virtual currency trading. The session underscored adherence to the 2021 9.24 Notice, which codifies a broad prohibition on operating virtual currency businesses in mainland China and intensifies the fight against illicit cross-border flows and money laundering via crypto.

Policy emphasis centers on preventing illegal use of stablecoins for foreign exchange manipulation and criminal proceeds, with particular attention to USDT and USDC. The discussion aligns with China’s established foreign exchange controls, where annual quotas are modest by design.

Analysts, including Lawyer Xiao Sa, view the 1128 Meeting as a reiteration of prior signals; the focus remains on illegal FX via stablecoins. The judiciary has intensified enforcement against crypto exchanges. Hong Kong, by contrast, keeps a relatively open stance toward virtual assets.