China moves to block offshore yuan-backed stablecoin issuance

Beijing has moved to prohibit the unapproved overseas issuance of yuan-linked stablecoins, reinforcing its hardline stance on crypto assets.

According to a joint notice issued on Friday by eight departments, including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), entities and individuals are not allowed to issue yuan-pegged stablecoins overseas unless they have lawful approval from the relevant authorities. Domestic firms are also banned from participating in or facilitating such activities through overseas affiliates.

The move is aimed at addressing renewed risks from virtual asset speculation and real-world asset tokenization. Regulators said the unauthorized issuance and related services could expose the financial system to money laundering, fraud, and cross-border capital risks, and undermine national financial security.

Building on the 2021 crackdown, the notice reiterates that virtual currencies, including stablecoins such as Tether, have no legal tender status and that related business activities constitute illegal financial activities. It stresses that stablecoins pegged to legal tender perform currency-like functions and therefore implicate monetary sovereignty, making them subject to strict state control.

The notice also strengthens oversight of financial, intermediary, and technology service providers, requires tighter compliance and internal controls, and establishes a coordinated enforcement framework between central and local authorities.

Officials said regulators will intensify monitoring of capital and information flows, crack down on illegal issuance and promotion, and expand public education efforts to ensure strict implementation of the stablecoin ban and safeguard monetary stability.

The directive comes as the global stablecoin market has expanded rapidly. According to Artemis Analytics, transaction volumes reached a historic high of $33 trillion in 2025, supported by favorable US policies and wider acceptance among major companies and investors.

China’s central bank is advancing its official digital yuan, the e-CNY, as the state-backed alternative to private stablecoins. Beginning January 1, 2026, interest became available on e-CNY wallets, marking a shift toward what authorities call “digital deposit money.”