China Tightens Crypto Crackdown as Stablecoin Risks Resurface
China's central bank has issued fresh warnings against stablecoins, emphasizing they lack legal tender status and pose systemic risks. The People's Bank of China (PBOC) convened emergency meetings with financial regulators following signs of renewed crypto speculation, particularly through offshore channels.
Authorities highlighted stablecoins' potential for money laundering and cross-border fraud, noting their non-compliance with China's strict financial identification protocols. This comes despite 2021's sweeping ban on all cryptocurrency transactions, which failed to eradicate mining activity—Bitcoin hash rate has rebounded to 14% of global production.
The regulatory clampdown extends to research initiatives exploring tokenization, with officials invoking Xi Jinping Thought to justify preemptive strikes against financial instability. Market observers note the irony of China's persistent crypto influence despite its prohibition stance.
