Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities.

Securities Times reporter He Jueyuan

The People’s Bank of China recently convened a meeting of the coordinated working mechanism to crack down on the trading and speculation of virtual currencies. Responsible officials from 13 departments, including the Ministry of Public Security and the Cyberspace Administration of China’s central office, attended the meeting. The meeting called for continued adherence to a prohibitive policy on virtual currencies and sustained efforts to crack down on illegal financial activities related to virtual currencies.

The meeting noted that in recent years, in accordance with the requirements of the “Notice on Further Preventing and Addressing Risks Relating to Virtual Currency Trading and Speculation” jointly issued by the People’s Bank of China and ten other departments in 2021, relevant entities have firmly cracked down on the trading and speculation of virtual currencies, rectified disorder in the virtual currency market, and achieved notable results. Recently, due to multiple factors, speculation and hype involving virtual currencies have seen a resurgence, related unlawful and criminal activities have occurred from time to time, and risk prevention and control face new situations and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as fiat currencies and do not have legal tender status; they should not and cannot be used as currency in circulation in the market. Businesses and activities related to virtual currencies constitute illegal financial activities. Stablecoins are a form of virtual currency. At present, they cannot effectively meet requirements such as customer identity verification and anti–money laundering, and there is a risk that they may be used for illegal activities such as money laundering, fundraising and fraud, and cross-border transfer of funds in violation of regulations.

The meeting requires that all entities treat risk prevention and control as an enduring theme in financial work, continue to uphold the prohibitive policy toward virtual currencies, and sustain crackdowns on illegal financial activities related to virtual currencies. All entities should deepen coordination and cooperation, improve regulatory policies and legal bases, focus on key areas such as the flow of information and the flow of funds, strengthen information sharing, further enhance monitoring capabilities, severely crack down on unlawful and criminal activities, protect the safety of people’s property, and maintain stable economic and financial order.

In recent years, virtual currencies issued by market institutions—especially stablecoins—have continued to emerge, but overall they are still in an early stage of development. Financial management departments such as international financial organizations and central banks generally take a cautious stance toward the development of stablecoins. In a report titled “The Next Generation of Money and the Financial System” released by the Bank for International Settlements (BIS) in June this year, concerns about stablecoin risks were clearly expressed. The report pointed out that stablecoins have shown some promise in terms of tokenization, but in the three key tests of singularity, resilience, and completeness, they still have not met the requirements to become a pillar of the monetary system. The report believes that what role stablecoins will play in future monetary systems remains to be seen.

Since this year, financial regulatory authorities in various parts of China have noted that some illicit institutions, under the guise of “financial innovation,” “digital currency,” “digital assets,” “blockchain technology,” and similar names, absorb funds by issuing or hyping investment projects that use new concepts as bait and promise high returns, thereby inducing the public to participate in trading and speculation. At present, financial regulatory authorities in various places or industry self-regulatory organizations have issued risk alerts, emphasizing that stablecoins are not tools for investment or speculation.

Earlier, Pan Gongsheng, governor of the People’s Bank of China, said at the 2025 Financial Street Forum that the central bank will continue, together with law enforcement departments, to crack down on the operation and speculation of virtual currencies within China, and maintain economic and financial order, while also closely tracking and dynamically assessing the development of stablecoins outside China.

(Editor: Wen Jing)

Keywords:

                                                            Virtual currency