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 interagency coordination mechanism for cracking down on virtual-coin trading hype.

The meeting pointed out that in recent years, various units have conscientiously implemented the decisions and deployments of the CPC Central Committee and the State Council. In accordance with the requirements of the “Notice on Further Preventing and Disposing of Risks of Virtual-Currency Trading and Hype” jointly issued by 10 departments including the People’s Bank of China in 2021, they have firmly cracked down on virtual-currency trading hype, rectified disorder in the virtual-currency market, and achieved clear results. Recently, driven by multiple factors, speculation and hype in virtual currencies have shown signs of picking up. Related illegal and criminal activities have occurred from time to time, and risk prevention and control are facing a new situation and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as fiat currency and do not have legal tender status. They should not and cannot be used as currency to circulate in the market. Business activities related to virtual currencies fall under illegal financial activities.

It is understood that this is the first time the central bank has publicly defined stablecoins. The meeting pointed out 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 they may be used for money laundering, fundraising and fraud scams, and illegal cross-border transfer of funds and other illegal activities.

The meeting called for making risk prevention and control the eternal theme of financial work, continuing to uphold the prohibition policy on virtual currencies, and steadily cracking down on illegal financial activities related to virtual currencies. Each unit should deepen coordinated cooperation, 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 responsible officials from the Ministry of Public Security, the Central Cyberspace Administration, the Central Financial Affairs Commission, 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