A renewed rise in cryptocurrency activity has prompted China’s central bank to restate its uncompromising position on virtual assets, warning that the resurgence in speculation poses fresh risks to financial stability. The comments followed a regulatory coordination meeting held by the People’s Bank of China (PBOC) on Friday, at which officials assessed the latest developments in digital asset markets.

In its statement, the PBOC said recent market conditions have contributed to an uptick in virtual currency trading and related activity, creating new challenges for risk containment. The bank reiterated that digital currencies lack the legal standing of fiat money and therefore cannot serve as legal tender in China. It stressed that business operations involving virtual currencies are considered illegal financial activities under existing regulations.

Stablecoins received particular scrutiny. Regulators argued that these instruments fail to meet China’s standards for customer identification, anti-money-laundering safeguards and cross-border fund monitoring. The PBOC warned that stablecoins could be exploited for money laundering, fraud and unauthorized international transfers—risks it said require tighter enforcement and heightened vigilance.

The central bank pledged to intensify crackdowns on illegal financial activities linked to virtual assets as part of a broader effort to preserve economic and financial stability. It also signaled that oversight will increasingly extend to monitoring global stablecoin developments, echoing remarks made in October by PBOC Governor Pan Gongsheng, who reaffirmed Beijing’s intention to suppress domestic virtual currency operations while closely tracking offshore products.

China maintains one of the world’s strictest stances on crypto, having banned cryptocurrency trading in 2021. Hong Kong, which operates under a separate regulatory system, has developed a framework for stablecoin oversight but is yet to issue licences to any provider.

Despite the mainland ban, signs of a subdued revival in Bitcoin mining have emerged. Industry sources say some miners—both individual and corporate—are tapping into low-cost electricity and expanding data center infrastructure in certain energy-abundant regions, quietly re-establishing operations once thought to have been decisively shuttered.

The central bank’s renewed warnings suggest Beijing sees rising speculative activity as an ongoing threat, underscoring its determination to keep China’s financial system insulated from cryptocurrency-related risks.