China’s renewed warning on digital assets has landed at a moment when global regulators are pulling crypto into the mainstream, offering a sharp contrast to Beijing’s hard line.
The message this week, delivered after a rare multi-agency gathering in Beijing, made clear that China sees no room for a policy shift — and is preparing for tighter enforcement as underground activity resurfaces.
China Reasserts That Crypto Remains Illegal And High-Risk
At a coordination meeting held on 28 November 2025, the People’s Bank of China (PBoC) reiterated that digital assets hold no legal status in the country.
Officials said private tokens “lack legal tender status, and should not and cannot be used as currency in the market,” renewing the country’s long-standing ban on trading, mining and crypto-linked business services.
Representatives from thirteen agencies, including the judiciary, top financial regulators, ministries and internet authorities, joined the meeting.
Local outlets such as Caixin noted that Beijing rarely reveals details of such high-level discussions, signalling concern at what regulators described as a “resurfacing” of speculative activity across informal channels.
Authorities said the 2021 ban had “rectified the chaos in the virtual currency market” and produced “significant results,” but warned that new forms of cross-border trading, mining and fundraising continue to emerge.
Why Beijing Says It Is Keeping The Ban In Place
The central bank argued that crypto activity remains fundamentally incompatible with China’s financial rules.
Officials said crypto-linked transactions are considered illegal financial activity under national law and violate requirements on capital controls, customer verification and anti-money-laundering checks.
Regulators said they will “severely crack down on illegal and criminal activities,” adding that enforcement agencies have been told to “monitor capital flows, bolster information sharing networks, further enhance monitoring capabilities, and severely crack down on illegal and criminal [crypto-related] activities.”
The PBoC said the renewed focus reflects ongoing risks tied to cross-border transfers, fraudulent fundraising and speculation linked to offshore platforms.
Why Stablecoins Are Treated As A Security Risk
Stablecoins were singled out as the most immediate concern.
The PBoC said they fail to meet identification and anti-money-laundering rules, warning that such gaps allow them to be misused for “money laundering, fundraising fraud, and illegal cross-border fund transfers.”
A translated PBoC statement noted:
“Stablecoins, a form of virtual currency, currently fail to effectively meet requirements for customer identification and anti-money laundering, posing a risk of being used for money laundering, fundraising fraud, and illegal cross-border fund transfers.”
That position echoes earlier remarks from former central bank governor Zhou Xiaochuan, who cautioned in July:
“Be wary of the risk of stablecoins being overused for asset speculation, as a deviation in direction could trigger fraud and instability in the financial system.”
Authorities said stablecoin use through offshore exchanges and informal payment channels remains widespread despite the mainland ban, prompting regulators to refocus on tracing illicit flows.
How Hong Kong’s Crypto Push Collides With Beijing’s Red Lines
Hong Kong’s regulated approach continues to operate alongside the mainland ban, but the distance between the two frameworks appears to be narrowing.
While Hong Kong has welcomed global exchanges and introduced licensing for stablecoin issuers, mainland authorities have recently intervened to rein in certain activities.
In September, top Chinese brokerages were told to pause real-world asset tokenisation projects in Hong Kong.
In October, officials moved to stop several Chinese tech firms from issuing stablecoins in the city.
Earlier reports said Beijing has been closely monitoring any cross-border involvement by mainland users or companies.
The PBoC’s latest remarks suggest that even legally licensed activity in Hong Kong may face constraints if it touches Chinese customers or allows token flows into the mainland.
Digital Yuan Development Moves Forward As Crypto Stays Out
While private digital assets remain banned, the state-backed digital yuan continues to expand.
More than 225 million personal e-CNY wallets have been opened since the pilot launched, with trials now used across public-sector services, retail payments and transport networks.
Beijing positions the e-CNY as the safe, compliant alternative to private tokens.
Officials have made clear that the digital yuan, not cryptocurrencies, will form the foundation of the country’s digital payments ecosystem.
Illegal Mining Persists Despite The National Ban
China banned crypto mining in 2021, but activity has quietly returned.
Reuters recently estimated that China now accounts for around 14% of global Bitcoin mining hashrate, behind only the United States and Russia.
Much of this is believed to be illegal or routed through disguised operations.
Calls from some academics to revisit the mining ban have surfaced, but analysts say such a reversal is unlikely.
The South China Morning Post quoted David Zhang of Trivium China as saying that Beijing’s energy-efficient AI ambitions “would not permit energy-intensive activities that contradict its development goals, such as Bitcoin mining, to persist or expand.”
Yang Liu, a partner at DeHeng Law Offices, added that authorities would not “encourage mining activities in the short term, let alone get involved in mining itself.”
Taken together, China’s latest message shows no sign of policy softening.
Regulators appear prepared to tighten enforcement on everything from stablecoins to offshore trading, while continuing to promote the digital yuan as the only authorised digital asset within its financial system.
Brian
Weiliang
Miyuki
Alex