The central bank and other departments have for the first time publicly set the tone, reaffirming their continued adherence to the ban on virtual currencies.

Source: Shanghai Securities Journal Author: Chang Peiqi

Recently, the People’s Bank of China held a coordination meeting to combat virtual currency trading speculation.

The meeting pointed out that in recent years, various units have seriously implemented the decisions and deployments of the Party Central Committee and the State Council. According to the requirements of the “Notice on Further Preventing and Dealing with Risks of Virtual Currency Trading Speculation” jointly issued by the People’s Bank of China and ten other departments in 2021, there has been a resolute crackdown on virtual currency trading speculation, rectifying the chaos surrounding virtual currencies, achieving significant results. Recently, due to various factors, speculation in virtual currencies has risen, and related illegal activities have occurred from time to time, posing new situations and challenges for risk prevention and control.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender, do not have legal compensation properties, and should not and cannot circulate as currency in the market. Activities related to virtual currencies are considered illegal financial activities.

It is understood that this is the central bank’s first public stance on stablecoins. The meeting pointed out that 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.

The meeting called for treating risk prevention and control as the eternal theme of financial work, continuing to adhere to prohibitive policies on virtual currencies, and persistently cracking down 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, and severely crack down on illegal activities, protecting the property safety of the people and maintaining the stability of the economic and financial order.

It is understood that responsible colleagues from the Ministry of Public Security, the Central Cyberspace Affairs Commission, the Central Financial Office, the Supreme People’s Court, the Supreme People’s Procuratorate, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Justice, the People’s Bank of China, the State Administration for Market Regulation, the National Financial Regulatory Administration, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange attended the meeting.

(Editor: Wen Jing)

Keywords:

                                                            Stablecoins