The People's Bank of China and Eight Other Departments: Virtual currency does not have the same legal status as fiat currency; related activities are considered illegal financial activities

On February 6, the People’s Bank of China (PBOC) and eight other government departments issued a notice outlining new measures to further prevent and address risks tied to virtual currencies. The notice clarifies key points: - Virtual currencies—including Bitcoin, Ethereum, and Tether—**lack legal tender status equivalent to fiat currency**. Characterized by non-governmental issuance, encryption technology/distributed ledger use, and digital form, they cannot circulate as legal currency in the market. - All virtual currency-related activities are classified as **illegal financial activities**. - Strictly prohibited in China are: - Exchanging RMB for virtual currencies or facilitating virtual currency trades - Acting as a central counterparty for virtual currency transactions - Providing information intermediary or pricing services for virtual currency trades - Token issuance financing - Trading virtual currency-linked financial products These actions are suspected of violations (e.g., illegal token issuance, unauthorized securities offerings, unlicensed securities/futures operations, illegal fundraising) and will be resolutely banned and shut down per law. - Overseas entities/individuals are barred from **illegally providing virtual currency services to domestic entities** in any form. - Stablecoins pegged to fiat currencies indirectly perform legal tender functions. No unit/individual (domestic or foreign) may issue RMB-pegged stablecoins overseas without prior regulatory approval.