China Doubles Down on Crypto Crackdown: Is Speculation Making a Comeback?

Beijing slams the regulatory hammer—again. The latest crypto ban tightens the screws, but whispers of speculation are already swirling in the shadows.

The Great Wall Gets Higher

Forget subtle policy shifts. This isn't a nudge—it's a shove. Chinese authorities are deploying a full-spectrum clampdown, targeting exchanges, mining operations, and peer-to-peer networks with renewed vigor. The message is unambiguous: digital assets have no place in the state's financial vision.

Underground Currents

Yet, bans have a funny way of breeding defiance. Where official channels close, unofficial ones pry open. The crypto ecosystem, ever-adaptive, is already exploring workarounds—decentralized exchanges, privacy coins, and offshore proxies. It's the classic cat-and-mouse game, fueled by a global asset class that refuses to be caged by borders.

A Global Ripple Effect

China's move sends tremors worldwide. Markets twitch at the news, a reminder that regulatory risk remains crypto's constant companion. But here's the twist: each crackdown also hardens the asset class's anti-fragility. Capital and innovation simply migrate, often finding more fertile—and friendly—ground elsewhere. It's a brutal lesson in decentralized resilience.

The Final Tally

So, is speculation resurfacing? Always. It just wears a different mask. For every door China slams shut, a window cracks open somewhere else. The relentless pursuit of profit, that cynical engine of finance, ensures the game never really ends—it just changes venues. The house might ban betting, but the players always find another table.

TLDR

• China’s central bank has reaffirmed its strict ban on cryptocurrency trading in response to renewed speculation.
• The People’s Bank of China has coordinated with 13 government agencies to combat illegal crypto activities.
• Stablecoins have been flagged by Chinese officials for their potential risks, including money laundering and fraud.
• Hong Kong-listed companies with exposure to crypto experienced sharp losses following China’s renewed crackdown.
• Despite a 2021 ban, China still holds a significant portion of Bitcoin’s global computing power.

China’s central bank has reaffirmed its stance on cryptocurrency trading, stressing the enforcement of its strict ban on digital currencies. The People’s Bank of China (PBOC) held a high-level meeting on November 28, 2025, to address concerns over renewed speculative activities in virtual assets. The bank called for coordinated efforts from 13 government agencies to prevent illegal cryptocurrency dealings that have surfaced despite years of regulation.

China Reaffirms Ban on Virtual Currency

The PBOC’s latest statement emphasized that stablecoins, a popular digital asset, pose risks related to money laundering, fraud, and illegal cross-border fund transfers. Officials highlighted that these coins are not recognized as legal tender and cannot function as currency in China. According to the PBOC, businesses involved with VIRTUAL currencies engage in illegal financial practices that threaten economic stability.

The PBOC also reiterated that these activities directly undermine China’s financial system. It made clear that all related operations, including trading and token issuance, are prohibited under current law. The central bank’s warning marks a renewed commitment to curbing the growth of the crypto market in China.

Hong Kong Companies Suffer Losses

Following the announcement of the renewed crackdown, shares in Hong Kong-listed companies with ties to crypto saw sharp declines. Yunfeng Financial Group, which has been moving into tokenization, dropped over 10% early on November 30. Similarly, Bright Smart Securities fell by 7%, and digital-asset platform OSL Group saw a 5% loss.

The selloff in these companies reflects growing concern that China’s hardline approach could affect Hong Kong’s aspirations to become a global digital asset hub. The city has recently passed legislation allowing stablecoin operations and attracting interest from major international firms like Circle and Standard Chartered.

Liu Honglin, founder of Man Kun Law Firm, said that the central bank’s statement has eliminated “any ambiguity, speculation, and illusions” about the country’s stance on stablecoins. He noted that the policy now draws a “concrete red line” on virtual asset regulations in China.

Challenges in Enforcement Persist

Although China has banned crypto trading and mining since 2021, enforcement continues to present challenges. Despite the ban, data from Luxor’s Global Hashrate Map reveals that China still controls 14.05% of Bitcoin’s total computing power. This places the country third globally, behind the United States and Russia.

In recent months, Chinese authorities have uncovered multiple underground crypto operations. These activities show that criminals continue to exploit digital assets for illicit financial transactions. In one case, police dismantled a cross-border banking network involved in laundering over $136 million through cryptocurrency.

Crackdown on Social Media and Local Governments

To further curb crypto trading, China has targeted social media platforms spreading information about virtual currency transactions. In May, the Cyberspace Administration of China shut down over a dozen accounts on Weibo, Douyin, and WeChat for promoting illegal crypto trading. The crackdown is part of a broader strategy to prevent citizens from engaging in illicit crypto activities.

Local governments in Beijing, Suzhou, and Zhejiang have also issued warnings about fundraising scams tied to virtual currencies. Despite these measures, over-the-counter crypto trading volumes remain high, reaching $75 billion in the first nine months of 2024.

Concerns Over Dollar-Backed Stablecoins

China’s government has expressed particular concerns about the global expansion of dollar-backed stablecoins. These stablecoins, such as Tether and USD Coin, are seen as a potential threat to the internationalization of the renminbi. With the stablecoin market surpassing $300 billion, Chinese officials view the dominance of USD-backed coins as an obstacle to China’s global economic goals.

Pan Gongsheng, governor of the People’s Bank of China, previously stated that stablecoins have “amplified weaknesses” in the global financial system. He criticized them for lacking adequate customer identification and anti-money laundering controls, raising national security concerns.

Despite the growing market for private cryptocurrencies, China continues to promote its state-backed digital yuan as the only legitimate alternative. The central bank has repeatedly emphasized that it will maintain a zero-tolerance policy for unauthorized crypto activities. The digital yuan is designed to offer a legal and controlled FORM of digital currency in China, distancing the country from the volatility of decentralized digital assets.