China’s PBOC Cracks Down on Virtual Currencies and Stablecoins, Declares No Legal Tender Status and That Related Activities Are Illegal

The People’s Bank of China (PBOC) convened the Working Mechanism for Coordinating the Crackdown on Virtual Currency Transaction Speculation to reaffirm its stance on crypto markets. The session underscored that virtual currency has no fiat status or legal tender designation and should not circulate as money in the broader market.

Officials highlighted that stablecoins are a subset of virtual currency with notable compliance gaps, including inadequate customer identification and AML controls. These gaps elevate risks of money laundering, illicit fundraising, and unauthorized cross-border transfers if not addressed by robust due diligence.

Market participants and financial institutions should align with evolving policy expectations, strengthening KYC and AML protocols and monitoring for speculative activity. The statement reinforces a cautious stance toward crypto products and signals continued regulatory tightening to safeguard financial stability and consumer protection.