Core Viewpoint - The People's Bank of China has officially classified stablecoins as a form of virtual currency, reinforcing its ban on virtual currency trading and highlighting the risks associated with stablecoins being used for illegal activities [1][2][3] Group 1: Regulatory Actions - The recent meeting led by the People's Bank of China aims to combat virtual currency trading and has defined stablecoins as virtual currencies, dispelling the notion of an exception for stablecoins in the crypto market [1] - The central bank emphasizes the need to maintain a prohibitive policy on virtual currencies and to continue cracking down on illegal financial activities related to them [1][3] Group 2: Market Reactions - Following the regulatory announcements, the cryptocurrency market experienced a significant downturn, with Bitcoin dropping below $86,000 and related stocks in Hong Kong seeing declines of over 15% [1] - The market's sensitivity to regulatory signals indicates the substantial impact of the People's Bank of China's stance on stablecoins [1] Group 3: Risks Associated with Stablecoins - Stablecoins, originally intended to mitigate cryptocurrency price volatility, have increasingly been used as tools for money laundering, illegal fundraising, and capital flight [2] - Reports indicate that stablecoins dominate the over-the-counter trading market in China, acting as a "shadow dollar" to circumvent foreign exchange controls [2] Group 4: Recommendations for Monitoring and Compliance - Financial institutions are advised to enhance customer identity verification and anti-money laundering systems, particularly for transactions involving stablecoins [4] - Payment institutions should avoid facilitating illegal virtual currency transactions and improve data-sharing mechanisms [4] - Law enforcement agencies are encouraged to enhance cross-border collaboration and include stablecoin transactions in the scope of illegal foreign exchange trading [4]

Core Viewpoint - The article discusses the recent regulatory developments regarding stablecoins in China, emphasizing their classification as virtual currencies and the associated risks, including money laundering and illegal cross-border fund transfers [3][5][10]. Regulatory Developments - The People's Bank of China (PBOC) led a meeting with 13 national regulatory bodies to officially include stablecoins in the virtual currency regulatory framework, marking a significant upgrade in regulatory measures [3][5]. - The meeting highlighted the need for enhanced compliance with customer identity verification and anti-money laundering (AML) requirements, as stablecoins currently do not meet these standards [3][5][10]. Risks Associated with Stablecoins - Stablecoins are increasingly being used for illegal activities, including money laundering and fraudulent fundraising, posing challenges to financial order [5][6]. - The article cites a case where individuals used stablecoins to facilitate illegal foreign exchange transactions, amounting to 6.5 billion yuan over three years [6]. International Context - The risks posed by stablecoins have become a focal point in global financial discussions, particularly at the recent IMF and World Bank meetings, where concerns about their inability to meet basic regulatory requirements were raised [9][10]. - The volatility of cryptocurrencies, particularly Bitcoin, has led to increased speculation and illegal activities, necessitating ongoing regulatory vigilance [10][11]. Ongoing Regulatory Efforts - Since 2013, China has established a multi-layered regulatory framework to address the illegal nature of virtual currencies, with various policies still in effect [10][11]. - The PBOC plans to continue its crackdown on domestic virtual currency operations and closely monitor the development of overseas stablecoins [11][12].

Core Viewpoint - The People's Bank of China has officially included stablecoins in the regulatory framework for virtual currencies, signaling a significant upgrade in the regulatory approach to combat illegal financial activities associated with virtual currencies [1][2]. Regulatory Developments - A meeting led by the People's Bank of China involved 13 national regulatory bodies, marking a comprehensive upgrade in the regulatory framework for virtual currencies, particularly focusing on stablecoins [1][2]. - The meeting emphasized the need for enhanced collaboration among regulatory units to improve monitoring capabilities and combat illegal activities related to stablecoins [2][3]. - The inclusion of stablecoins in the illegal financial activities framework indicates a more stringent regulatory environment aimed at curbing money laundering and other illicit activities [1][2]. Market Implications - The volatility in the cryptocurrency market, particularly the significant fluctuations in Bitcoin prices, has raised concerns about the stability and regulatory compliance of stablecoins [1][6]. - Rating agency S&P Global has downgraded Tether (USDT) from "4" (restricted) to "5" (vulnerable), reflecting growing concerns about the risks associated with stablecoins [1]. Legal Actions - There has been an increase in regulatory actions against cryptocurrency businesses, with many being prosecuted for illegal operations, money laundering, and other financial crimes [3][4]. - A notable case involved a group that facilitated illegal foreign exchange transactions using stablecoins, highlighting the risks of cross-border financial flows facilitated by these digital assets [3]. Global Context - The risks associated with stablecoins have become a focal point in global financial discussions, particularly at the recent IMF and World Bank meetings, where concerns about their compliance with anti-money laundering regulations were raised [5][6]. - The ongoing challenges in regulating stablecoins reflect broader issues in the global financial system, including vulnerabilities in financial sovereignty for developing economies [5]. Ongoing Monitoring - The regulatory landscape for virtual currencies, including stablecoins, is expected to remain stringent, with continuous efforts to monitor and evaluate developments in both domestic and international markets [7]. - The People's Bank of China plans to maintain its prohibitive stance on virtual currencies while closely tracking the evolution of stablecoins globally [7].

Core Viewpoint - The People's Bank of China has officially included stablecoins in the regulatory framework for virtual currencies, highlighting the risks associated with their use in illegal activities such as money laundering and cross-border fund transfers [1][2][5]. Regulatory Developments - A recent meeting led by the People's Bank of China involved 13 national regulatory bodies, marking a significant upgrade in the regulatory approach to virtual currencies, particularly stablecoins [1][2]. - The meeting emphasized the need for enhanced collaboration among regulatory units to improve monitoring capabilities and combat illegal financial activities [2][3]. Market Implications - The rating agency S&P Global has downgraded Tether (USDT) from "4" (restricted) to "5" (vulnerable), reflecting growing concerns over the stability and compliance of major stablecoins [1]. - The volatility in the cryptocurrency market, particularly the dramatic fluctuations in Bitcoin prices, has intensified scrutiny on stablecoins and their potential to disrupt financial order [5][6]. Legal Actions - Chinese judicial authorities have increased their regulatory efforts against cryptocurrency businesses, with many being prosecuted for illegal operations related to stablecoins [3][4]. - A notable case involved a group that facilitated illegal foreign exchange transactions using stablecoins, amounting to 6.5 billion yuan over three years [3]. Global Context - The risks associated with stablecoins have become a focal point in international discussions, particularly at the recent IMF and World Bank meetings, where concerns about their role in money laundering and regulatory evasion were raised [5][7]. - The ongoing regulatory measures in China are part of a broader global trend towards stricter oversight of virtual currencies, with an emphasis on maintaining financial stability [7].

21世纪经济报道记者张欣 稳定币监管迎来了重要转折！ 近日，中国人民银行（以下简称"央行"）召开打击虚拟货币交易炒作工作协调机制会议。会议强调："虚拟货币不具有与法定货 币等同的法律地位，不具有法偿性，不应且不能作为货币在市场上流通使用，虚拟货币相关业务活动属于非法金融活动。稳定 币是虚拟货币的一种形式，目前无法有效满足客户身份识别、反洗钱等方面的要求，存在被用于洗钱、集资诈骗、违规跨境转 移资金等非法活动的风险。" 2021年9月成为监管深化的关键节点，前述十部门联合发布的《通知》正式出炉，将监管力度提升至新高度。《通知》明确指 出，开展法定货币与虚拟货币兑换、作为中央对手方买卖虚拟货币等相关业务活动均属于非法金融活动。在此之后，境内虚拟 货币交易平台悉数关闭，相关业务被全面清理。 进入2025年，虚拟货币市场的新动向推动监管政策进一步细化升级。一方面，香港《稳定币条例》于8月1日正式生效，设置稳 定币发牌制度引发市场广泛关注；另一方面，比特币等虚拟货币价格暴涨暴跌催生投机热潮，以"稳定币"为噱头的非法金融活 动也随之抬头。不法分子利用这一热点，以高额回报为诱饵诱导公众投资实施诈骗，部分还冒用企业名义发行稳 ...

Core Viewpoint - The People's Bank of China (PBOC) has reinforced its regulatory stance on stablecoins, categorizing them as a form of virtual currency and emphasizing their lack of legal status equivalent to fiat currency, thereby prohibiting their circulation and related activities in the market [1][5][9]. Regulatory History - The regulatory framework for virtual currencies in China has evolved since 2013, with multiple government bodies consistently asserting that virtual currencies do not hold the same legal status as fiat currencies and prohibiting their use in financial activities [2][4]. - Key regulatory milestones include the 2021 notice that intensified scrutiny on virtual currency activities, leading to the closure of domestic trading platforms [2][4]. Recent Developments - The emergence of new regulations, such as Hong Kong's Stablecoin Regulation, has prompted further scrutiny of stablecoins, especially in light of rising speculative activities and associated risks [3][4]. - The PBOC has highlighted the challenges posed by new technologies like blockchain, which have facilitated the growth of stablecoins while also complicating financial regulation [4][5]. Risk and Compliance Concerns - Stablecoins are viewed as high-risk due to their potential use in illegal activities such as money laundering and fraud, primarily because of their anonymous or semi-anonymous nature [8][12]. - The lack of effective customer identification and transaction traceability in stablecoin transactions raises significant compliance issues [8][12]. Regulatory Strategy - The PBOC's recent classification of stablecoins as virtual currencies aims to unify enforcement actions across various regulatory bodies, facilitating coordinated governance and legal clarity [9][10]. - Future regulatory measures are expected to focus on tightening compliance requirements for stablecoin-related activities, including issuance, trading, and payment processing [10][11]. Market Impact - The stringent regulatory environment is likely to restrict the operational space for stablecoins within China, pushing related activities towards offshore financial centers [10][11]. - The total market capitalization of stablecoins has reached approximately $300 billion, with USDT maintaining a market share of around 60%, indicating the significant scale of these assets despite regulatory challenges [11].

Core Viewpoint - The cryptocurrency concept stocks in Hong Kong experienced a collective decline following the People's Bank of China's recent statement on virtual currencies and stablecoins, which highlighted regulatory concerns and risks associated with these financial instruments [1]. Group 1: Market Reaction - Hong Kong cryptocurrency stocks saw significant drops, with Huajian Medical falling over 13%, OK Blockchain and Yunfeng Financial both declining over 11%, and several others like Boya Interactive and New Fire Technology Holdings dropping nearly 7% [2]. - The declines reflect market sentiment in response to regulatory developments regarding virtual currencies and stablecoins [1]. Group 2: Regulatory Developments - The People's Bank of China published an article discussing the coordination mechanism for combating virtual currency trading speculation, marking a significant regulatory stance on stablecoins [1]. - The article defined stablecoins as a form of virtual currency that currently fails to meet requirements for customer identity verification and anti-money laundering, posing risks of illegal activities such as money laundering and fundraising fraud [1]. - A prominent WEB 3 industry lawyer noted that this is the first official definition of stablecoins in a formal document, effectively categorizing them under the regulatory framework for illegal financial activities in mainland China [1]. Group 3: Implications for the Market - The regulatory stance is expected to indirectly affect the stablecoin market in Hong Kong, as mainland institutions may adopt a more cautious and low-profile approach to entering the Hong Kong stablecoin market [1].

Group 1 - The State Council's Safety Committee has issued a notice to conduct a comprehensive inspection and rectification of major fire risks in high-rise buildings, focusing on residential and public buildings undergoing renovations [2] - The National Bureau of Statistics reported that the manufacturing PMI for November is 49.2%, a slight increase of 0.2 percentage points from the previous month, indicating a slight improvement in economic conditions [2] - From January to October, state-owned enterprises reported total operating revenue of 6,835.293 billion yuan, a year-on-year increase of 0.9%, while total profits decreased by 3.0% to 342.144 billion yuan [2] Group 2 - The People's Bank of China held a meeting to coordinate efforts against virtual currency trading, emphasizing the continuation of prohibitive policies and the need to combat illegal financial activities related to virtual currencies [3] - The Ministry of Industry and Information Technology held a meeting to discuss the regulation of the power and energy storage battery industry, aiming to promote high-quality development and address irrational competition [4] - A new regulation was released by three departments regarding customer due diligence and transaction record management, removing the requirement for banks to register the source of funds for cash withdrawals exceeding 50,000 yuan [4] Group 3 - The China Securities Index Company announced adjustments to several indices, including the CSI 300 and CSI 500, which will take effect after market close on December 12 [5] - Tianfeng Securities is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure and illegal financing [7] - ST Cube has been warned of potential delisting due to false records in annual reports from 2021 to 2023, effective December 2 [8]

Core Viewpoint - The recent joint meeting of 13 departments in China marks a significant escalation in the regulation of virtual currencies, particularly focusing on stablecoins as a form of illegal financial activity, indicating a shift from risk prevention to criminalization of such activities [2][3][8]. Regulatory Focus - The meeting signals a shift in regulatory focus from "mining and speculation risks" in 2021 to "cross-border capital flows and shadow dollars" in 2025 [5][6]. - Stablecoins, particularly USDT, are identified as a major gray channel for capital outflow, with USDT accounting for approximately 90% of OTC transactions in China [6][8]. Systemic Risks - S&P downgraded USDT's stability rating to "weak," citing an increase in high-risk assets from 17% to 24%, with Bitcoin comprising 5.6% of its reserves [9][10]. - USDT's circulation has approached $184 billion, creating a "shadow dollar pool" with systemic risks due to its high volatility and low collateralization [9][10]. Shadow Banking Concerns - Tether, the issuer of USDT, is becoming akin to a "shadow central bank," with significant holdings in gold and other commodities, raising concerns about its influence on global price chains [10][11]. - The increase in Tether's gold reserves, which reached approximately 116 tons, poses structural risks for countries pursuing "de-dollarization" [10][12]. Regulatory Evolution - The regulatory approach has evolved from defining virtual currencies as illegal to explicitly categorizing stablecoins as illegal financial activities, aiming to protect capital account management and monetary sovereignty [13][14]. - The regulatory logic remains consistent: virtual currencies are illegal, stablecoins fall under this category, and their cross-border and gray uses must be curtailed to pave the way for the digital yuan (e-CNY) [14][19]. Enforcement Mechanisms - The regulatory framework will involve enhanced collaboration among various government agencies to monitor and control information and capital flows, aiming to block illegal activities [20][21]. - Criminalization of stablecoin transactions may extend to charges related to money laundering and aiding cybercrime, increasing the legal risks for individuals and institutions involved [21][22]. Global Implications - The tightening of regulations in China is expected to raise compliance pressures for institutions and increase the risks associated with gray channels for individuals [22][23]. - The global landscape for stablecoins is entering a "second phase," with heightened awareness and regulatory responses to the risks posed by these financial instruments [22][23].

Core Viewpoint - The People's Bank of China (PBOC) emphasizes the continuation of a supportive monetary policy stance to foster economic recovery and maintain financial market stability amid complex domestic and international challenges [2][3]. Group 1: Monetary Policy - As of the end of September, the total social financing stock grew by 8.7% year-on-year, broad money (M2) increased by 8.4%, and the RMB loan balance rose by 6.6%, indicating a state of moderately loose monetary policy [2]. - The PBOC has utilized various monetary policy tools to ensure ample liquidity, creating a favorable monetary environment for economic recovery and stable financial market operations [2][3]. - The PBOC plans to continue implementing a moderately loose monetary policy and will resume operations in the secondary market for government bonds to enhance the monetary policy toolkit [3]. Group 2: Credit System and Personal Financing - The PBOC is developing a one-time personal credit relief policy to help individuals who have defaulted on loans due to the pandemic but have since repaid them, aiming to improve their credit records [4]. - This policy will prevent certain default information from being displayed in the credit system, facilitating personal financing and economic participation [4]. Group 3: Digital Currency Management - The PBOC is committed to optimizing the management system for digital currency, having established operational centers in Shanghai and Beijing for international cooperation and system maintenance [5]. - The central bank will continue to monitor and regulate virtual currency activities while promoting the development of the digital RMB ecosystem [5]. Group 4: Macro-Prudential Management - The PBOC is advancing the construction of a comprehensive macro-prudential management system, focusing on systemic financial risk monitoring, risk prevention measures for key institutions, and enhancing the macro-prudential management toolkit [6]. - The central bank aims to create a dynamic and collaborative process for building this system, which is essential for maintaining overall financial stability and supporting high-quality economic development [6].