China Cracks Down on Cryptocurrencies Again in 2025—Stablecoins Now in the Crosshairs
- Why Is China Escalating Its Crypto Crackdown in 2025?
- Stablecoins: The New Target
- Mining’s Resilient Underground Economy
- Hong Kong’s Contradictory Crypto Embrace
- What’s Next for Crypto in China?
- Q&A: Decoding China’s Crypto Moves
China’s central bank is doubling down on its crypto crackdown, this time explicitly targeting stablecoins like USDT and USDC. Despite a 2021 ban, crypto activities—including mining—have resurged, with China reclaiming 14% of the global hashrate. Authorities warn of "new financial risks," while Hong Kong takes a contrasting approach by licensing stablecoin issuers. Here’s the full breakdown.
Why Is China Escalating Its Crypto Crackdown in 2025?
Last week, China’s central bank (PBOC), Ministry of Public Security, and Cyberspace Administration held a high-profile meeting to reinforce the country’s anti-crypto stance. Officials reiterated that cryptocurrencies lack legal tender status and warned that commercial crypto activities remain "illegal financial operations." Yet, mining has quietly rebounded—China now accounts for 14% of the global bitcoin hashrate, per late 2025 data from CoinMarketCap. PBOC Governor Pan Gongsheng vowed to "intensify efforts" to curb crypto-related risks, echoing his October 2024 remarks.
Stablecoins: The New Target
This crackdown takes a fresh twist: stablecoins are now explicitly flagged as threats. Unlike decentralized cryptocurrencies, stablecoins like Tether’s USDT and Circle’s USDC are pegged to fiat currencies, enabling fast transfers and tax-efficient trading. But China argues they bypass KYC/AML protocols, facilitating "cross-border capital flight, fraud, and money laundering." The irony? Hong Kong, China’s special administrative region, launched a stablecoin licensing framework in August 2025 under its Monetary Authority. Talk about regulatory whiplash.
Mining’s Resilient Underground Economy
Despite China’s 2021 mining ban, miners have adapted—relocating to covert facilities or leveraging excess renewable energy. "The hashrate rebound suggests sophisticated evasion tactics," notes a BTCC market analyst. Case in point: Inner Mongolia’s 2023 wind-farm mining operations, which disguised power usage as "data center activity."
Hong Kong’s Contradictory Crypto Embrace
While mainland China tightens restrictions, Hong Kong is courting crypto firms. Its stablecoin licensing scheme mirrors Singapore’s MAS framework, aiming to attract issuers like Circle. "Hong Kong wants to be Asia’s Web3 hub without upsetting Beijing," observes. The dichotomy highlights China’s balancing act: stifling crypto domestically while allowing controlled experimentation in Hong Kong.
What’s Next for Crypto in China?
Expect tighter surveillance of peer-to-peer trading and VPN usage. The PBOC may also pressure banks to freeze accounts linked to offshore exchanges like BTCC. Historically, China’s crackdowns create short-term sell-offs but rarely kill crypto innovation—remember the 2017 ICO ban? Yet, with stablecoins now in focus, Tether’s dominance could face unprecedented scrutiny.
This article does not constitute investment advice. Crypto markets are volatile; only invest what you can afford to lose.
Q&A: Decoding China’s Crypto Moves
Why is China targeting stablecoins now?
Stablecoins threaten capital controls. Their peg to USD lets users MOVE value offshore instantly—a headache for China’s strict forex regime.
How has mining survived the ban?
Mining pools disguise operations as cloud computing or use decentralized hosting. Some local officials turn a blind eye for economic incentives.
Will Hong Kong’s policies influence mainland China?
Unlikely. Hong Kong operates under "one country, two systems." Its crypto rules are designed to isolate risks from the mainland.
