According to representatives of the People's Bank of China, stablecoins pose a serious threat to the financial stability of the country. In this regard, the bank plans to update its measures aimed at combating cryptocurrency trading, which was officially banned in China back in 2021. This statement was the result of discussions with 12 other government agencies. In leadership circles, it is believed that speculation with cryptocurrencies among the population has once again intensified, raising concerns about China's financial security, media reports.
China's Measures Against Cryptocurrencies
In a recent statement, the People's Bank of China cited the following quote referenced by Cointelegraph.
“Virtual currencies do not have the same legal status as traditional money, do not have the status of legal tender, and cannot be used as currency in the market. Activities related to these currencies are considered illegal financial activities.”
The ban on cryptocurrency trading and mining was introduced by the Central Bank of China in 2021, arguing the need to combat crime and potential risks to the financial system.
Additionally, the Central Bank identified stablecoins as a special category of problematic assets, noting that they do not meet legal requirements and are used in criminal schemes. The following remark was made:
“Stablecoins are a type of virtual currency and currently cannot effectively meet the requirements for customer identification and anti-money laundering, which creates a risk of their use in illegal activities.”
The bank reaffirmed its position, stating its intention to “consistently combat illegal financial activities” related to cryptocurrencies to “maintain the stability of the economic and financial environment.”
Participants in the meeting with 13 agencies noted that they would “deepen coordination and cooperation” in tracking cryptocurrency users, enhancing data sharing and increasing monitoring capabilities.
China ranks third in the world in terms of Bitcoin mining share, accounting for about 14% of the total computing power of this cryptocurrency. Thus, despite the official ban, shadow mining continues to develop in China.
