The Central Bank of China reaffirmed this Saturday (29) its strict stance regarding virtual currencies, warning of a resurgence of speculation and promising to crack down on illegal activities involving stablecoins.

The PBOC (People's Bank of China) stated, in a coordination meeting on the regulation of virtual currencies on Friday (28), 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," the PBOC stated in a communication, adding that business activities related to virtual currencies are "illegal financial activities." The central bank specifically highlighted concerns about stablecoins, stating that they do not meet customer identification requirements and anti-money laundering controls.

The statement warned that assets are at risk of being used for illegal activities, including money laundering, fraud, and unauthorized international fund transfers. The central bank stated that it will "intensify efforts to combat illegal financial activities related" and "maintain economic and financial stability."

In October, the governor of the PBOC, Pan Gongsheng, stated that the central bank would continue to suppress the operation and speculation of domestic virtual currencies while closely monitoring and dynamically assessing the development of foreign stablecoins.

Hong Kong, which has established a regulatory regime for stablecoins, has yet to grant any licenses to issuers. In China, cryptocurrency trading has been prohibited since 2021.

Bitcoin mining is quietly returning to China, despite having been banned four years ago, as individual and corporate miners exploit cheap electricity and the growth of data centers.$BTC