China has intensified its crackdown on virtual currencies, issuing fresh warnings over the growing risks associated with stablecoins and unregulated digital assets. The country’s financial regulators said virtual currencies continue to threaten financial stability, enable illicit transactions, and undermine the state-controlled monetary system.
Authorities highlighted that stablecoins—digital tokens pegged to real-world assets—pose a unique challenge because they can facilitate cross-border capital flows outside official oversight. China fears such instruments could weaken its capital controls and create parallel financial channels. Regulators also pointed out the global failures of certain stablecoins, citing risks of depegging, liquidity crises, and investor losses.
The crackdown will focus on platforms offering cryptocurrency trading, promotions, and technical support within China, even if operated from overseas. Officials stressed that any involvement in crypto-related business—including marketing or providing financing—will face strict penalties. Internet platforms and payment gateways have been instructed to intensify monitoring and block crypto activity.
China’s stance follows its long-standing policy of prohibiting cryptocurrency trading and mining. However, the latest warning signals heightened vigilance as the global crypto market rebounds and stablecoins gain mainstream adoption.
Analysts say China’s approach underscores its commitment to preserving monetary sovereignty while accelerating its own central bank digital currency (e-CNY) rollout. The country aims to eliminate unregulated digital assets while promoting a state-backed alternative aligned with its financial governance model.
