The PBOC said crypto and stablecoins lack fiat-level legal status and aren’t legal tender. They must not be used as a medium of exchange in daily markets.
The regulator also clarified that businesses facilitating virtual asset transactions could be considered engaged in illegal financial activity. This is a clear signal that China maintains a strict approach to crypto and is wary of financial risks tied to digital assets.
Stablecoins and Regulatory Risks
Regulators specifically targeted stablecoins, which aim to track fiat value. The PBOC pointed out that these tokens cannot currently meet robust know your customer and anti-money laundering standards. Without proper compliance measures, stablecoins can create risks. This includes money laundering, fundraising fraud, and illicit cross-border capital flows.
Essentially, regulators are concerned that large sums of unmonitored capital could move through these assets, bypassing traditional banking and oversight systems.
On Nov. 28, China’s central bank (PBOC) convened a coordination meeting and reiterated that: Virtual assets do not have the same legal status as fiat, are not legal tender, and must not be used as currency in market circulation; related business activities constitute illegal…
— Wu Blockchain (@WuBlockchain) November 29, 2025
This caution reflects a global pattern. For example, in 2023, the collapse of a major algorithmic stablecoin in the United States highlighted how quickly stablecoins can fail to protect investors and the broader financial system. Regulators in multiple countries have since increased scrutiny on crypto assets to ensure investor safety and prevent systemic risks. China’s warnings align with this trend, signaling that even widely used digital tokens remain under strict oversight in key markets.
Implications for Crypto Users and Businesses
The PBOC’s statements serve as a reminder for crypto users and companies operating in or near China. Virtual assets pose high risks, especially in places with weak legal protections and limited compliance rules.
Investors should be aware that while crypto can offer opportunities, using it in ways that mimic currency can lead to legal consequences. Clear message to businesses: prioritize compliance, or authorities may treat grey-area operations as illegal.
JUST IN: 🇨🇳 China’s PBOC says virtual assets, including stablecoins, are not legal tender and related activities are illegal due to KYC, AML, and cross-border risk concerns. pic.twitter.com/l0JukYJ0Jj
— Whale Insider (@WhaleInsider) November 29, 2025
As China continues to refine its regulatory approach, beginners and investors should pay attention to the distinction between digital assets and fiat currency. Stablecoins may offer convenience and stability, but regulatory hurdles remain significant. Understanding legal frameworks and following compliance best practices can help users navigate a complex environment while mitigating risk.
Disclaimer
The information provided by Altcoin Buzz is not financial advice. It is intended solely for educational, entertainment, and informational purposes. Any opinions or strategies shared are those of the writer/reviewers, and their risk tolerance may differ from yours. We are not liable for any losses you may incur from investments related to the information given. Bitcoin and other cryptocurrencies are high-risk assets; therefore, conduct thorough due diligence. Copyright Altcoin Buzz Pte Ltd.
The post China Reaffirms Crypto Restrictions, Warns on Stablecoins appeared first on Altcoin Buzz.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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