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

Securities Times reporter He Jueyuan

Recently, the People’s Bank of China held a coordination meeting to combat speculation in virtual currency trading, attended by responsible officials from thirteen departments including the Ministry of Public Security and the Central Cyberspace Administration. The meeting required a continued adherence to the prohibitive policy on virtual currency and an ongoing crackdown on illegal financial activities related to virtual currencies.

The meeting pointed out that in recent years, various units have resolutely fought against speculation in virtual currency trading and rectified the chaos surrounding virtual currencies in accordance with the requirements of the “Notice on Further Preventing and Handling Risks of Virtual Currency Trading Speculation” jointly issued by the central bank and ten other departments in 2021, achieving significant results. Recently, due to various factors, speculation and trading in virtual currencies have risen, and related illegal activities have occurred, presenting new risks and challenges for risk prevention and control.

The meeting emphasized that virtual currencies do not have the same legal status as fiat currencies, do not possess legal tender status, and should not and cannot be circulated and used as currency in the market; activities related to virtual currencies are considered illegal financial activities. Stablecoins are a form of virtual currency that currently cannot effectively meet requirements for customer identity verification, anti-money laundering, and other aspects, posing risks of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers.

This meeting required all units to make risk prevention and control an eternal theme of financial work, continue to adhere to the prohibitive policy on virtual currencies, and maintain a crackdown on illegal financial activities related to virtual currencies. All units should deepen cooperation, improve regulatory policies and legal bases, focus on key links such as information flow and capital flow, strengthen information sharing, further enhance monitoring capabilities, severely combat illegal activities, protect the property safety of the public, and maintain the stability of economic and financial order.

In recent years, virtual currencies issued by market institutions, especially stablecoins, have continuously emerged, but overall they are still in the early stages of development. International financial organizations and central banks generally adopt a cautious attitude toward the development of stablecoins. The Bank for International Settlements (BIS) expressed concerns about the risks of stablecoins in a report titled “Next Generation Money and Financial Systems” published in June this year, pointing out that while stablecoins show some prospects in tokenization, they have not yet met the requirements to become a pillar of the monetary system in terms of uniqueness, resilience, and integrity. The report believes that the role of stablecoins in the future monetary system remains to be seen.

Since the beginning of this year, financial regulatory departments in many regions of China have noticed that some illegal institutions have used names such as “financial innovation,” “digital currency,” “digital assets,” and “blockchain technology” to absorb funds through investment projects that hype new concepts, promising high returns and inducing the public to participate in trading speculation. Currently, financial regulatory departments or industry self-regulatory organizations in multiple regions have issued risk alerts, emphasizing that stablecoins are not tools for investment or speculation.

The governor of the central bank, Pan Gongsheng, stated at the 2025 Financial Street Forum Annual Meeting that the central bank will continue to work with law enforcement agencies to combat the operation and speculation of virtual currencies within the country, maintain economic and financial order, and closely track and dynamically assess the development of overseas stablecoins.

(Edited by Wenjing)

Keywords:

Virtual currency