China Reaffirms Anti-Crypto Position as Authorities Strengthen Crackdown on Digital Asset Speculation

Mainland China has once again reinforced its strict anti-crypto stance, pledging to intensify its crackdown on virtual currency speculation amid growing concerns over financial risks. According to a recent report from China Daily, top officials from the People's Bank of China (PBOC), the Ministry of Public Security, the Central Cyberspace Affairs Commission, and other regulatory bodies emphasized that virtual currencies do not possess the legal status of fiat money and are banned from use as currency in the domestic market. Authorities reiterated that all crypto-related activities—including trading, issuance, and associated financial operations—remain illegal in mainland China.

Officials highlighted a renewed surge in speculative trading across the country, warning that the trend is creating fresh challenges for financial stability. Despite China’s aggressive measures targeting both cryptocurrency mining and digital asset speculation, the country has unexpectedly re-emerged as the world’s third-largest Bitcoin mining hub. This resurgence has raised questions about underground mining operations and the difficulty of fully enforcing nationwide restrictions.

During the inter-agency meeting, the PBOC specifically addressed concerns surrounding stablecoins—digital tokens pegged to fiat currencies such as the U.S. dollar. Regulators argued that stablecoins lack adequate customer verification and anti-money laundering safeguards. According to the central bank, these gaps make stablecoins potential tools for money laundering, illegal cross-border fund transfers, and fraudulent schemes. The comments also underline the stark regulatory divide between China and the United States, where policymakers are steadily moving toward a more favorable regulatory framework for stablecoin issuers.

While mainland China continues to tighten its rules, Hong Kong remains an outlier due to its separate legal and financial system. The city has adopted a far more supportive approach to the crypto and blockchain industry. Stablecoins were a major focus at the government-backed Hong Kong FinTech Week, and Financial Secretary Paul Chan recently delivered a keynote address at CoinDesk’s Consensus conference, signaling ongoing support for digital asset innovation.