China warned again against cryptocurrencies, considers them illegal

China's central bank has reaffirmed its tough stance against virtual currencies and warned of a rise in speculation. At the same time, it announced that it would tighten measures against illegal activities related to stablecoins.

According to the People's Bank of China (PBOC), speculative trading in cryptocurrencies is on the rise again and poses new risks to financial supervision. The PBOC reminded that virtual currencies do not have the legal status of official currencies and their use as legal tender is prohibited. It has labelled trading activities with them as "illegal financial activities".

In particular, the bank warned against stablecoins, which it said do not comply with rules on customer identification and anti-money laundering. They could be misused for fraud or illegal cross-border transfers.

The central bank said it would step up the fight against illegal activities and protect financial stability. Governor Pan Gongsheng stressed back in October that the PBOC would continue to take strict measures against domestic cryptocurrencies and monitor the development of foreign stablecoins.

China banned cryptocurrency trading in 2021. Yet bitcoin mining is quietly resuming in the country, driven by cheap electricity and the development of data centers in energy-rich provinces, according to industry data.

(reuters, mmi)