In a recent turn of events, China’s central bank has intensified its crypto ban, sparking a coordinated government effort to clamp down on renewed speculation and identify stablecoins as the main threat.
The Chinese crypto crackdown
Despite sweeping bans in place since 2021, the People’s Bank of China (PBoC) convened a critical meeting on November 28, 2025, involving 13 government agencies.
The PBoC’s specific focus on stablecoins suggests that China’s financial defenses are shifting.
There is no longer a fight against volatile assets like Bitcoin [BTC] – instead, the real war is against any decentralized instrument that threatens the authority of its currency and the integrity of its strict capital controls.
The core issue driving the renewed crackdown is the PBoC’s insistence that virtual currencies are not legal tender and cannot function as a means of payment in Chinese markets.
Why are officials so concerned?
The PBoC reconfirmed that crypto-related activities are illegal and pose a threat to China’s financial stability, but stablecoins continue to challenge this attitude.
Paired with fiat currencies, stablecoins offer a discreet way to move money and bypass China’s strict capital controls.
In its meeting with 13 agencies, the PBoC warned that stablecoins lack proper customer identification and AML safeguards, making them a key tool for illicit cross-border transfers and shadow banking activities.
As Liu Honglin, founder of Man Kun Law Firm, noted, the official statement has erased “any ambiguity, speculation and illusions” surrounding China’s stablecoin policy, adding:
“Regulators have drawn a concrete red line on what was once a vague boundary line.”
Ripple effect
The timing of China’s renewed crackdown is closely linked to growing enthusiasm in Hong Kong.
After Hong Kong passed its stablecoin law in May, interest in digital assets soared and flowed into mainland China despite the 2021 ban.
But Beijing has now taken steps to halt that momentum.
The PBoC’s latest action makes it clear that even Hong Kong-regulated stablecoins pose a threat to the yuan and the e-CNY rollout.
Major tech companies such as Ant Group and JD.com had already halted plans for stable coins in Hong Kong after pressure from the PBoC.
China’s securities regulator also urged local brokers to pause RWA tokenization efforts, signaling a broad effort to curb crypto activity across the region.
Market response
The immediate financial impact of the coordinated crackdown was sharp and punishing Hong Kong-listed stocks with cryptocurrency-related companies plummeted on December 1.
Shares of Yunfeng Financial Group (038.HK), which has expanded into cryptocurrency and tokenization, fell more than 10% in early trading, putting the company on track for its worst day in two months.
Bright Smart Securities and Commodities Group (1428.HK) fell about 7% and the Digital asset platform OSL Group (0863.HK) lost more than 5%.
What’s more?
This shows that China’s renewed, coordinated crackdown is not just a repeat of the 2021 ban – it is a strategic, surgical operation targeting the specific threat that stablecoins pose to national capital controls and economic stability.
China’s crackdown on private tokens comes as the country considers issuing its own yuan-backed stablecoins, an effort to expand the yuan’s global reach and counter U.S. dominance in digital finance.
So while Hong Kong markets and mainland traders may feel the immediate impact, the broader consequence is an ever-deepening digital currency divide between the world’s two largest economies.
Final thoughts
- The crackdown is not a repeat of 2021. By coordinating thirteen agencies, Beijing has explicitly targeted stablecoins as the last loophole allowing capital flight.
- The move puts decisive pressure on Hong Kong’s ambitions to become a global digital asset hub.