Recently, influenced by various factors, speculative activities related to virtual currencies and the tokenization of real-world assets have occurred frequently, posing new challenges and situations for risk prevention and control,” regulators including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission said in a notice Friday (Feb. 6). The announcement was cited in a report by Coindesk, which noted that the ban extends to foreign entities and people offering such services inside China. It also blocks domestic organizations from issuing digital currencies overseas without regulatory authorization.
The notice argued that stablecoins can duplicate critical functions of sovereign money and thus provide a threat to monetary control. Thus, the new rules forbid any entity, either in China or overseas, from issuing a RMB-linked stablecoin without the government’s permission. Chinese companies that want to tokenize assets overseas must not get approvals or file with regulators, while their financial and tech partners will face increased compliance standards.
The new rules follow the ban on crypto mining and crypto-related business activity imposed in 2021. The news follows reports from last year that Chinese authorities, including the PBOC and the Cyberspace Administration of China, had instructed the country’s big tech companies to hold off on launching stablecoin projects.
Leave a Reply