Stablecoins – A Red Line That Cannot Be Crossed in China

In November 2025, a meeting led by the People's Bank of China and attended by 13 departments including the Ministry of Public Security, the Supreme People's Court, and the Supreme People's Procuratorate sent a clear signal: stablecoins are a form of virtual currency, and all related business activities constitute illegal financial activities.

This is a rare instance of the official government directly naming stablecoins. Four years have passed since the 924 Notice in 2021, which comprehensively cracked down on virtual currencies, but for many cryptocurrency practitioners and investors, a question remains: are stablecoins different from "speculative" cryptocurrencies like BTC and ETH? They are pegged to fiat currency and have relatively stable prices, so why do they also cross the regulatory red line?

In most parts of the world, stablecoins are moving towards compliance. The US passed the GENIUS Act in July 2025, the EU's MiCA regulation officially came into effect in 2024, and Singapore and Hong Kong have established corresponding regulatory frameworks. However, in mainland China, stablecoins remain a red line that cannot be crossed.

Where does this red line come from? How is it implemented in law enforcement? What risks do ordinary people face when holding or trading USDT? This article attempts to present a complete picture through policy documents, real-world cases, and international comparisons.