China’s central bank has issued a fresh warning against digital assets, explicitly targeting stablecoins as tools for money laundering and fraud while reiterating its absolute ban on the sector.
China Doubles Down on Crypto Ban, Labels Stablecoins a Money Laundering Risk
1 December 2025 - 08:20 CET
By Sandmark staff
The People’s Bank of China (PBoC) convened a high-level meeting on 28 Nov with 12 other state bodies to address what it called a "resurgence" in speculative trading. In a statement following the meeting, the central bank emphasized that virtual currencies "do not have the same legal status as legal tender" and that all related business activities remain illegal.
Specific targets
While Beijing formally outlawed cryptocurrency transactions in September 2021, this latest directive places new emphasis on stablecoins. The PBoC warned that the asset class "cannot effectively satisfy" customer identity and anti-money laundering (AML) requirements, making them a vehicle for illegal fund transfers and pyramid schemes.
The regulator called on local authorities to focus on "capital flow" and "information flow" to sever the links between domestic investors and offshore crypto platforms.
Sovereign alternative
The crackdown underscores Beijing’s determination to maintain a state-controlled monetary framework via its Central Bank Digital Currency (CBDC), the e-CNY.
While private crypto remains blacklisted, the digital yuan is being integrated deeper into the commercial banking system. According to official figures, the e-CNY has processed more than 14.2tn yuan ($1.9tn) in transactions across pilot programs since 2019. PBoC Governor Pan Gongsheng recently championed the sovereign currency as a tool to bolster state oversight, contrasting it with the "vulnerabilities" of private stablecoins like USDT and USDC.
Underground mining
Despite the four-year ban, China remains a central player in the global crypto ecosystem. The country accounts for an estimated 14% of the global Bitcoin hashrate, ranking third worldwide, according to data from Hashrate Index.
Much of this activity has gone underground, utilizing surplus power in regions like Xinjiang. The sector also garnered attention earlier in November following allegations by China’s cybersecurity agency that the US government had effectively seized 127,000 Bitcoin from a Chinese mining pool, LuBian, in 2020, funds that hackers stole, Beijing claims.
