China upholds its prohibition on cryptocurrencies and targets stablecoins as virtual currency trading picks up again. The People’s Bank of China (PBOC), the country’s central bank, said again that crypto trading is illegal in China since speculation over virtual currencies is on the rise. The PBOC said that new crypto activity is making it harder to monitor risk after meeting with 12 other government entities.
The bank declared that virtual currencies are not legal tenders and can’t be used as money in the market. In 2021, the PBOC outlawed crypto trading and mining because they thought it could lead to crime and hurt the economy.
Coins that don’t change pointed out as a major issue
The PBOC explicitly pointed out stablecoins, saying that they don’t meet legal standards and could be used for money laundering, fraud in fundraising, and unlawful transfers of money across borders. The bank added, Stablecoins are a type of virtual currency, and right now they can’t meet the requirements for customer identification and anti-money laundering.
To keep the economy and financial system stable, the central bank said it would “persistently crack down on illegal financial activities” tied to crypto. The 13 concerned authorities pledged to enhance their collaboration, closely monitor the situation, and exchange information to identify cryptocurrency users.
What this means for the region and the world
As of October, China was still the third-largest place for Bitcoin mining, with a 14% share of the global market. Reports say that in August, Chinese officials told brokers to stop promoting stablecoin research and cancel seminars.
Hong Kong, on the other hand, has chosen a different route. In July, it started giving licenses to stablecoin issuers. But some tech companies put their plans to launch stablecoins on hold after hearing that Chinese officials were involved. This shows how policies in the mainland affects the overall area.