The central bank of China promises to take strong measures against virtual currencies and points out concerns about stablecoins

The central bank of China reaffirmed on Saturday its firm stance on virtual currencies, warning of a resurgence of speculation and promising to take strong measures against illegal activities related to stablecoins.

The People's Bank of China said on Friday at a coordination meeting on virtual currency regulation that speculation with cryptocurrencies has recently increased due to various factors, presenting new challenges for risk control, according to a statement released by the central bank.

"Virtual currencies do not have the same legal status as fiat currencies and cannot be used as legal tender in the market," stated the People's Bank of China (PBOC) in a statement, adding that commercial activities related to virtual currencies constitute "illegal financial activities."

The central bank specifically highlighted concerns about stablecoins, stating that they do not meet customer identification requirements or anti-money laundering controls.

It warned that stablecoins are at risk of being used for illegal activities, including money laundering, fraud, and unauthorized cross-border fund transfers.

The central bank stated that it would intensify its efforts to combat related illegal financial activities and to maintain economic and financial stability.

In October, the governor of the People's Bank of China, Pan Gongsheng, stated that the central bank would continue to combat the operation and speculation of domestic virtual currencies, while at the same time closely monitoring and dynamically assessing the development of stablecoins abroad.