China is escalating its scrutiny of digital asset activity as the People’s Bank of China (PBOC) convenes senior officials across law enforcement, cyberspace administration, and judicial bodies. The meetings center on new enforcement measures aimed at curbing stablecoin and crypto payments that officials say have resurfaced despite the country’s 2021 ban. Regulators cited a rise in unauthorized fundraising, cross-border transfers, and online fraud schemes tied to anonymized digital asset flows.
Authorities reiterated that virtual assets have no legal tender status in China and cannot circulate as a means of payment. Stablecoins, in particular, were flagged for complicating customer identification and hindering financial investigations. Officials described these factors as contributing to broader financial risk management challenges at a time when local governments face fiscal constraints.
Institutional Coordination and Market Implications
The PBOC is calling for tighter inter-agency coordination, including enhanced monitoring tools, data-sharing infrastructure, and closer cooperation between financial supervisors and public security units. The initiative aligns with China’s broader effort to safeguard capital controls and reinforce oversight of domestic payment channels amid macroeconomic pressures.
China’s posture also reflects growing sensitivity to digital asset developments outside the mainland. Earlier this year, the securities regulator informally asked major Hong Kong brokerages to pause tokenization projects, signaling caution toward offshore digital asset expansion. Meanwhile, state-linked enterprises have explored blockchain-based settlement models, and policymakers are discussing the potential issuance of yuan-backed stablecoins to strengthen China’s role in global payments.
These moves illustrate Beijing’s dual approach: restricting private crypto activity while assessing controlled, state-managed digital finance systems. The renewed enforcement push suggests rising concern that stablecoin flows could undermine domestic oversight as global regulatory frameworks continue to advance.
