China’s Central Bank Rejects Crypto Policy Shift

People’s Bank of China Governor Pan Gongsheng has put rumors to rest with a firm declaration that China’s cryptocurrency restrictions remain unchanged. Speaking at an annual financial conference in Beijing, the central bank chief explicitly referenced the series of prohibitions rolled out since 2017 and emphasized that these existing policies continue to govern China’s approach to digital assets. This definitive statement comes after months of speculation that Beijing might be preparing to soften its long-standing crypto ban, particularly following developments in Hong Kong’s regulatory landscape.

The governor’s remarks carry significant weight given his position at the helm of China’s central banking system. By specifically mentioning the 2017 prohibitions, Pan Gongsheng reinforced the continuity of China’s anti-crypto stance, which has included banning initial coin offerings, shutting down cryptocurrency exchanges, and prohibiting financial institutions from handling crypto transactions. His speech leaves no room for interpretation about the mainland’s position, effectively closing the door on any expectations of policy relaxation in the near future.

The speculation about potential policy shifts gained traction following Hong Kong’s implementation of a stablecoin licensing regime in August. The special administrative region’s move to establish a regulated framework for stablecoins attracted significant attention, with several companies—including some from mainland China—reportedly lining up to apply for licenses in the city. This development had created optimism among market observers who interpreted it as a possible testing ground for broader policy changes.

However, Pan Gongsheng’s speech makes clear that Hong Kong’s regulatory experiments should not be seen as indicative of mainland China’s position. The separation between Hong Kong’s financial policies and those of the mainland has been reinforced by this announcement, highlighting the distinct regulatory approaches between the two jurisdictions. The presence of mainland Chinese companies applying for Hong Kong licenses had particularly fueled speculation about coordinated policy shifts, but the PBOC governor’s statement confirms these were misinterpreted signals.

Governor Pan’s specific mention of stablecoins underscores the particular concern Chinese regulators have regarding this category of digital assets. Stablecoins, which are typically pegged to traditional currencies like the US dollar, represent a particular challenge for monetary authorities because they could potentially compete with sovereign currencies and complicate monetary policy implementation. The PBOC’s continued opposition to stablecoins aligns with China’s broader efforts to maintain control over its financial system and currency sovereignty.

The timing of this reaffirmation is significant given global regulatory developments around stablecoins and the simultaneous mention of Japanese yen coming to decentralized finance in related discussions. While other jurisdictions are exploring regulated frameworks for stablecoins, China’s position remains firmly opposed. This stance reflects ongoing concerns about financial stability, capital controls, and the potential for digital assets to facilitate unauthorized cross-border capital flows that could undermine China’s carefully managed financial system.

The PBOC’s definitive statement has immediate implications for global cryptocurrency markets and Chinese companies operating in the digital asset space. Companies that had been positioning for potential mainland market access will need to recalibrate their strategies, while international crypto firms hoping for Chinese market entry must acknowledge that the world’s second-largest economy remains firmly closed to their operations. The announcement reinforces China’s status as having one of the world’s strictest digital asset regulatory environments.

For the broader cryptocurrency ecosystem, China’s maintained position represents both a challenge and a clarification. While it removes the near-term potential of accessing Chinese retail investors, it also provides certainty about regulatory boundaries. Market participants can now operate with clearer understanding that Hong Kong’s developments represent a separate regulatory jurisdiction rather than a precursor to mainland policy changes. This clarity may help stabilize expectations and prevent further speculation-driven market volatility related to potential Chinese policy shifts.