What changes have occurred in China's regulatory attitude towards Crypto Assets over the past four years?

Article Introduction

The cryptocurrency regulatory storm in mainland China, which has lasted for four years, has not subsided; instead, it is showing a more precise crackdown strategy by the end of 2025.

In September 2021, the People's Bank of China and ten other departments jointly issued the “Notice on Further Preventing and Dealing with Risks of Virtual Currency Trading Speculation” (i.e., Document No. 237), which clearly defined that activities related to virtual currencies are considered illegal financial activities, establishing a strict regulatory tone for virtual currencies in our country.

On November 28, 2025, four years later, the central bank held another meeting of the coordination mechanism for combating speculation in virtual currency trading, attended by thirteen departments, emphasizing the continued adherence to the prohibitive policy on virtual currencies.

Two important meetings are four years apart, and China's virtual currency regulatory strategy has evolved from an initial comprehensive definition and prohibition to a more precise and in-depth crackdown system.

From Ten Departments to Thirteen Departments Coordination

Compared to the regulatory actions in 2021 and 2025, the most obvious difference is the increase in the number of participating departments. The 2021 “Notice” was jointly issued by ten departments, including the People's Bank of China, while the 2025 meeting was expanded to include responsible comrades from thirteen departments such as the Ministry of Public Security, the Cyberspace Administration of China, the Central Financial Work Office, and the National Development and Reform Commission.

The increase in the number of departments not only indicates an expansion of regulatory scope but also reflects an upgrade in regulatory strategies. The regulatory framework in 2021 mainly focused on finance, internet information, and market regulation, while by 2025, it encompasses more law enforcement and macro-management departments.

This change reflects China's judgment that the risks associated with virtual currency trading speculation have expanded from purely financial risks to broader socio-economic security risks.

The 2025 conference clearly stated: “Taking risk prevention and control as the eternal theme of financial work, continuing to adhere to the prohibitive policy on virtual currencies, and continuously combating illegal financial activities related to virtual currencies.”

This indicates that after four years of practice, virtual currency regulation has become a regular component of China's financial risk prevention and control, rather than a temporary or campaign-style remediation action.

First Clarification of Stablecoin Risks

The 2021 “Notice” provided a comprehensive definition of mainstream virtual currencies such as Bitcoin, Ethereum, and Tether, clearly stating that they “do not have the same legal status as fiat currency.” Meanwhile, the 2025 conference continued this tone while publicly defining stablecoins for the first time.

The meeting clearly pointed out: “Stablecoins are a form of virtual currency that currently cannot effectively meet the requirements for customer identification, anti-money laundering, and other aspects, posing risks of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers.” This signifies a more nuanced and in-depth understanding of virtual currency risks by Chinese regulatory authorities.

Stablecoins, as a type of virtual currency that attempts to peg its value to fiat currency, have rapidly developed globally in recent years. However, their so-called “stability” does not change their essential attributes as virtual currencies. The 2025 conference specifically pointed out the deficiencies of stablecoins in anti-money laundering, highlighting the regulators' precise focus on the risks associated with these specific virtual currencies.

This precise regulatory strategy aligns with global regulatory trends, as indicated by some research reports, “Financial management departments such as international financial organizations and central banks generally take a cautious attitude towards the development of stablecoins,” and Chinese regulatory agencies also have a clear understanding of this.

The Imagination Space of Stablecoins is Narrowing

In May 2025, Hong Kong's “Stablecoin Regulation” was officially published and came into effect on August 1, establishing a clear licensing system for stablecoins. Subsequently, Chinese internet giants such as JD.com and Ant Group have been reported to be actively laying out plans in the stablecoin market in Hong Kong.

The recent regulatory meeting has had a direct impact on enterprises' stablecoin strategies in Hong Kong. Analysts believe that while this meeting does not currently affect the relevant stablecoin arrangements in Hong Kong, speculation around stablecoins in mainland China will be severely cracked down upon. The future scope for relevant domestic entities to lay out stablecoins in Hong Kong will be significantly narrowed, more limited to practical application scenarios such as cross-border payments and supply chain finance.

Recently, the President of the Hong Kong Monetary Authority, Yu Weiwen, emphasized that stablecoins are not tools for investment or speculation, but rather one of the payment tools that use blockchain technology, and they do not have appreciation potential. He revealed that the licensing for stablecoins in Hong Kong has relatively high thresholds, stating, “We expect to issue at most only a few licenses in the initial stage.”

As regulatory policies continue to intensify, the survival space for covert trading activities in virtual currencies will be further compressed. The meeting called for all units to deepen collaboration, improve regulatory policies and legal foundations, focus on key areas such as information flow and capital flow, enhance information sharing, and further improve monitoring capabilities.

In the future, buying and selling USDT may no longer be regarded as ordinary violations, but may instead be classified as “illegal foreign exchange transactions” or as crimes related to “aiding information network crimes.” This means that regulation is moving from the first stage of “risk prevention” to the second stage of “criminal governance.”

From a global perspective, the upgrade of regulations in China sharply contrasts with the compliance processes in the United States, Hong Kong, and other regions. As an international financial center, Hong Kong's institutional regulatory path continues to advance at a set pace. With the regulatory boundaries in the mainland becoming clearer, Hong Kong's position as a regional compliance hub in Asia will be further strengthened.

The virtual currency industry is undergoing a test of balancing compliance and innovation amid a regulatory storm.