China Reinforces Ban on Cryptocurrency Activities

China Enforces Comprehensive Cryptocurrency Ban

China's central bank and financial regulators have reaffirmed strict restrictions on cryptocurrency-related activities, emphasizing that virtual currencies are not recognized as legal tender. Authorities highlighted that business operations involving cryptocurrencies are illegal, signaling a move towards tighter enforcement both domestically and on overseas-linked entities.

Expanded Ban on Token Issuance and Overseas Entities

The People's Bank of China declared that domestic entities are prohibited from issuing virtual currencies without formal approval, extending this rule to overseas entities under Chinese control. This restriction encompasses tokens, stablecoins, and similar financial instruments.

Regulators specified that any issuance must adhere to approved channels, with unauthorized activities being strictly prohibited. Authorities cited potential financial and security risks associated with crypto issuance, applying the ban irrespective of issuance location.

Crackdown on Trading, Mining, and Stablecoins

Authorities reiterated a comprehensive ban on crypto trading and mining activities, noting that exchanges and intermediaries are barred from offering related services or payment support. The prohibition extends to unapproved RMB-linked stablecoins, emphasizing the risks of money laundering and unauthorized cross-border transfers.

Restrictions on Tokenization and RWA Projects

Regulators addressed the use of crypto and real-world asset (RWA) products, stating that tokenization is generally prohibited unless explicitly approved under designated infrastructure. Approved projects must operate within regulated financial systems to ensure investor protection and financial stability.

Coordinated Enforcement and Public Education

Enforcement efforts will involve central and local authorities, coordinating actions and monitoring offshore operations linked to domestic entities. Public education campaigns will be launched to highlight risks and legal boundaries, aiming to deter participation in illegal activities. Authorities reiterated that cryptocurrencies are not legal tender and cannot be used for payments or pricing.