BEIJING, Nov 29 (Reuters) – China’s central bank reaffirmed its tough stance on virtual currencies on Saturday, warning of a resurgence in speculation and vowing to crack down on illegal activities involving stablecoins.
The People’s Bank of China (PBOC) said at a coordination meeting on virtual currency regulation on Friday that speculation in cryptocurrencies has increased recently due to various factors, presenting new challenges for risk control, according to a statement released by the central bank.
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“Virtual currencies do not have the same legal status as fiat currency and cannot be used as legal tender in the market,” the People’s Bank of China said in a statement, adding that business activities related to virtual currencies are “illegal financial activities.”
The central bank specifically highlighted concerns over stablecoins, saying they do not meet requirements for customer identification and anti-money laundering controls.
He warned that stablecoins risk being used for illegal activities, including money laundering, fraud and unauthorized cross-border fund transfers.
The central bank said it would “step up efforts to combat illegal financial activities” and “maintain economic and financial stability.”
In October, People’s Bank of China Governor Pan Gongsheng said the central bank would continue to crack down on the operation and speculation of domestic virtual currencies, while closely monitoring and dynamically evaluating the development of overseas stablecoins.
Hong Kong, which has a regulatory regime in place for stablecoins, has yet to grant any licenses to issuers. In China, cryptocurrency trading has been banned since 2021.
Reporting by Ziyi Tang and Ryan Woo; Editing by Toby Chopra
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