Market News

China Raises Alarm on Crypto Regulations from Central Bank Perspective

China's central bank has intensified warnings regarding stablecoins, pointing out significant shortcomings in global financial oversight.

Governor Pan Gongsheng emphasized that privately issued "virtual currencies," particularly stablecoins, present challenges to monetary sovereignty and expose gaps in regulatory frameworks.

During the 2025 Financial Street Forum, he noted that stablecoins, while still developing, are already amplifying regulatory blind spots internationally.

Pan referenced discussions from the recent IMF/World Bank Annual Meetings, highlighting that stablecoins fail to meet crucial requirements for customer identification and anti-money laundering.

The governor reaffirmed China's hardline stance against domestic crypto activities, underscoring ongoing enforcement against trading and speculation.

He indicated that since 2017, the People's Bank of China (PBOC) has been actively issuing policies to mitigate risks associated with crypto trading in China.

While maintaining strict restrictions on crypto within its borders, China is also closely monitoring offshore stablecoins that could involve domestic users.

As stablecoins gain traction in global commerce, Pan's comments reflect a cautious approach amid evolving discussions on the use of yuan-linked instruments.

Despite lobbying efforts for offshore yuan-based stablecoins, authorities remain firm in their prohibition of cryptocurrencies on the mainland.

Currently, the total crypto market cap stands robust at $3.84 trillion, even as China's regulatory landscape remains unchanged.