China’s central bank reiterated its tough stance on virtual currency activities as the 2025 Financial Street Forum Annual Meeting opened Monday, with officials underscoring ongoing global concerns about stablecoins and their potential financial risks.
Pan Gongsheng, Governor of the People’s Bank of China, said the market for virtual currencies, particularly stablecoins issued by private institutions, remains in its infancy and poses several regulatory challenges. He noted that major international financial bodies and central banks are maintaining a cautious approach toward the expansion of these digital assets.
Global Debate on Stablecoin Risks
Pan’s remarks follow recent discussions at the International Monetary Fund and World Bank Annual Meetings in Washington, D.C., where stablecoins were identified as a key area of concern among finance ministers and central bank governors. According to those meetings, stablecoins have yet to meet fundamental standards for customer identification and anti-money laundering compliance.
Officials warned that such gaps heighten risks of money laundering, illicit cross-border transfers, and terrorist financing, while amplifying speculative behaviour in financial markets. These shortcomings, experts said, threaten to worsen global financial vulnerabilities and may undermine monetary sovereignty, particularly in developing economies.
Domestic Regulation to Remain Firm
Pan emphasized that China’s existing policies restricting virtual currency trading and speculation remain in full force. Since 2017, the People’s Bank of China, in collaboration with other government agencies, has introduced several measures to prevent financial instability arising from cryptocurrency activities. He said the central bank would continue coordinating with law enforcement to curb illegal operations related to virtual assets, ensuring that China’s financial system remains stable and insulated from external shocks.
While Pan acknowledged that virtual currencies and stablecoins have continued to evolve globally, he stressed that China will maintain a vigilant stance. The central bank plans to closely monitor developments abroad and assess their potential impact on domestic financial stability.
Regulatory Coordination Ahead
Looking forward, Chinese authorities are expected to intensify cross-border cooperation with international regulators to address loopholes in global financial oversight. Analysts suggest that the renewed focus signals China’s intent to reinforce its existing framework while adapting to emerging risks linked to digital assets.
Pan’s statements align with Beijing’s broader policy goal of preserving financial order and minimizing speculative disruptions. As global debate around stablecoins deepens, China’s position underscores a preference for stability and state-backed oversight over market-driven virtual currencies.
