On November 29, China’s central bank, the People’s Bank of China, stated that digital currencies, including stablecoins, do not qualify as legal money and are banned from use as official tender in domestic markets.
Authorities raised alarm over a recent uptick in crypto speculation. They noted that it creates new challenges for managing financial risks and enforcing regulations.
According to a Reuters report, bank officials stressed that stablecoins fall short of key safeguards, such as user identification and anti-money laundering measures.
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Concerns were also voiced about stablecoins being misused for illegal purposes, including money laundering, fraud, and unapproved cross-border transfers.
The central bank announced plans to strengthen efforts to halt financial activities involving stablecoins that violate the law. The goal is to preserve economic and financial order.
The bank reaffirmed that crypto trading has been banned in mainland China since 2021, though separate mining activity has quietly returned in regions with low power costs.
Hong Kong, operating under a distinct legal framework, has implemented a licensing regime for stablecoin issuers. However, so far, no licenses have been issued.
The South African Reserve Bank stated that there is no immediate demand for a retail central bank digital currency (CBDC) in the country. Why? Read the full story.
