Chinese authorities are launching a renewed enforcement campaign against cryptocurrency trading as speculative activity rebounds despite years of strict prohibitions.
Regulatory Warning
The People’s Bank of China (PBOC) issued a fresh warning that virtual currencies, including stablecoins, lack legal tender status and cannot function as currency within China’s market framework.
“Virtual currency-related business activities constitute illegal financial activities,” the central bank stated.
High-Level Coordination
The statement followed a high-level inter-agency meeting involving:
- People’s Bank of China
- Ministry of Public Security
- Cyberspace Administration of China
- Central Financial Stability and Development Office
- Supreme People’s Court
The coordinated approach signals Beijing’s commitment to its 2021 position, declaring all virtual currency transactions illegal and potentially destabilizing—despite tens of millions of Chinese users continuing to access offshore trading platforms.
Enforcement Mechanisms
China employs multiple tactics to suppress crypto activity, according to Lacie Zhang, research analyst at Bitget Wallet:
- Technical barriers: National firewall blocks foreign exchanges; domestic app stores flag offshore trading apps as high-risk
- Financial restrictions: Banks and payment processors are banned from handling crypto-linked transactions
- Content moderation: Platforms including Douyin (ByteDance) and Xiaohongshu (Rednote) expanded restrictions on investment and crypto-promotional content
- Public campaigns: State media regularly issues fraud and speculation warnings
“Together, these measures reduce visible onshore participation while leaving some activity to migrate to offshore or less transparent channels,” Zhang said.
Historical Context
China’s 2021 crackdown “rectified the chaos in the virtual currency market,” according to the PBOC. Enforcement also targeted crypto mining operations, forcing the once-dominant domestic mining industry offshore.
The latest push indicates authorities view current market conditions as requiring renewed vigilance against speculative trading.
An experienced fintech marketer, now diving into Web3, crypto markets, and decentralized systems. Breaking down complex blockchain developments for accessible understanding.
