Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities

The Securities Times Reporter He Jueyuan

The People’s Bank of China recently held a meeting to coordinate efforts to crack down on virtual currency trading and speculation, attended by officials from 13 departments including the Ministry of Public Security and the Central Cyberspace Administration. The meeting emphasized the continued enforcement of the ban on virtual currencies and the ongoing crackdown on illegal financial activities related to virtual currencies.

The meeting pointed out that in recent years, various agencies have strictly enforced the requirements outlined in the 2021 joint notice issued by the PBOC and ten other departments on further preventing and managing risks associated with virtual currency trading and speculation. Significant progress has been made in cracking down on virtual currency trading and rectifying related chaos. Recently, due to multiple factors, virtual currency speculation has resurged, with illegal activities occurring from time to time, posing new challenges for risk prevention and control.

The meeting stressed that virtual currencies do not have the same legal status as legal tender, lack legal enforceability, and should not and cannot circulate as currency in the market. Activities involving virtual currencies are considered illegal financial activities. Stablecoins are a form of virtual currency that currently cannot effectively meet requirements for customer identification and anti-money laundering, and pose risks of being used for money laundering, fundraising scams, and illegal cross-border fund transfers.

The meeting called on all units to treat risk prevention as an ongoing priority in financial work, uphold the ban on virtual currencies, and continue to crack down on illegal financial activities related to virtual currencies. Agencies should deepen coordination, improve regulatory policies and legal frameworks, focus on key areas such as information flow and capital flow, enhance information sharing, strengthen monitoring capabilities, severely crack down on illegal activities, protect the property rights of the public, and maintain the stability of the economic and financial order.

In recent years, virtual currencies issued by market institutions, especially stablecoins, have continued to emerge, but the overall development is still in its early stages. International financial organizations and central banks generally adopt a cautious attitude toward the development of stablecoins. The Bank for International Settlements (BIS) released a report in June this year titled “Next Generation Money and Financial Systems,” which explicitly expressed concerns about the risks of stablecoins. The report noted that while stablecoins show some promise in tokenization, they have not yet met the key criteria of uniqueness, resilience, and integrity to become a pillar of the monetary system. It concluded that the future role of stablecoins in the monetary system remains to be seen.

Since the beginning of this year, financial regulators across China have observed that some illegal organizations, under the guise of “financial innovation,” “digital currency,” “digital assets,” and “blockchain technology,” have been raising funds through issuing or speculating on investment projects with new concepts as gimmicks, promising high returns and inducing public participation in trading and speculation. Currently, many financial regulators and industry self-regulatory organizations have issued risk warnings, emphasizing that stablecoins are not tools for investment or speculation.

Pang Gongsheng, Governor of the People’s Bank of China, previously stated at the 2025 Financial Street Forum that the central bank will continue to work with law enforcement agencies to crack down on domestic virtual currency operations and speculation, maintain economic and financial order, and closely monitor and dynamically assess the development of offshore stablecoins.

(Edited by: Wen Jing)

Keywords: Virtual Currency