On the evening of February 6, China’s central bank and seven other ministries issued a joint notice that treats virtually all virtual-currency related business activity as illegal and subject to forcible closure. The document, an update to earlier 2021 guidance, explicitly names activities such as onshore exchange of fiat for crypto, crypto-to-crypto trading, token issuance and fundraising, provision of pricing or information services for trading, and crypto-linked financial products as illegal financial activities that will be “strictly prohibited” and “resolutely eradicated.”
The notice also imposes a clear new constraint on stablecoins: without permission from relevant regulators, no domestic or foreign entity may issue a stablecoin pegged to the renminbi from overseas. Authorities framed the move as a defence of monetary sovereignty, arguing that fiat-linked stablecoins can perform partial functions of legal tender and therefore present systemic risks.
Regulatory enforcement is comprehensive. Internet platforms are barred from offering hosting, marketing, paid traffic or other services to crypto and tokenisation businesses, and are required to report illegal activity and to provide technical assistance for investigations. Market regulators will tighten company registrations and advertising rules—business names and operating scopes may not include terms such as “virtual currency,” “stablecoin,” “RWA” or “tokenisation.” Telecom, cybersecurity and public security organs are empowered to take down websites, apps (including mini-programs) and public accounts used for crypto business on referral from financial supervisors.
The notice reiterates a coordinated campaign against crypto “mining.” The National Development and Reform Commission and other agencies were instructed to strictly control mining projects; several local governments have already issued bans or restrictions citing power allocation and financial risk concerns. Financial institutions and power utilities are explicitly instructed not to facilitate mining projects with credit, electricity hookups or services disguised as data-centre or digital-economy ventures.
Chinese authorities framed the revision as a response to a fresh surge in speculative crypto activity and the rapid emergence of tokenisation of real-world assets (RWA), which they say have changed the risk landscape since 2021. The document was produced jointly with the Central Cyberspace Administration, the Supreme People’s Court and the Supreme People’s Procuratorate, signalling that enforcement will involve administrative shutdowns as well as potential criminal and civil prosecutions under existing laws covering illegal fundraising, unauthorised securities issuance and unlawful securities or futures operations.
For global markets and firms, the notice has concrete consequences. It effectively closes onshore legal channels for retail and institutional Chinese participation in crypto trading and tokenisation, and it forbids the creation of any RMB-pegged offshore stablecoin without express approval—complicating cross-border payment use-cases that have relied on such vehicles. International exchanges, custodians and stablecoin issuers that previously served Chinese clients face either to block Chinese users more aggressively or to risk regulatory entanglement through local partners.
The practical effect will be to push activity further offshore or underground. China’s controls historically reduce visible domestic trading and mining but do not eliminate demand; the most likely near-term outcomes are a contraction of regulated onshore service providers, higher compliance costs for international players, a consolidation of mining and liquidity provision in jurisdictions willing to host them, and a potentially greater emphasis on privacy-preserving or peer-to-peer channels that skirt formal platforms.
The notice is the most explicit reiteration yet of Beijing’s zero-tolerance stance toward crypto’s intersection with the formal financial system. For policymakers, the priority is clear: guard monetary sovereignty, stem capital flight and prevent retail investment losses. For entrepreneurs and foreign firms, the message is equally clear: the Chinese market for crypto services remains effectively closed unless regulators change course or permit narrowly defined pilots under strict supervision.