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

BlockBeats News, February 6, The People's Bank of China and eight other departments issued a notice on further preventing and disposing of risks related to virtual currency. The notice pointed out that virtual currency does not have the same legal status as fiat currency. Virtual currencies such as Bitcoin, Ethereum, and Tether have the main characteristics of being non-governmental issuance, using encryption technology and distributed ledger or similar technology, existing in digital form, etc., do not have legal tender status, should not and cannot be used as currency circulating in the market. Virtual currency-related activities belong to illegal financial activities.

Conducting RMB and virtual currency exchange business, virtual currency exchange business, acting as a central counterparty for buying and selling virtual currency, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and virtual currency-related financial product transactions in the territory are suspected of illegal activities such as illegal token issuance, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, etc., all strictly prohibited, resolutely banned according to law. Overseas entities and individuals are not allowed to illegally provide virtual currency-related services to entities in the territory in any form. Stablecoins pegged to fiat currency indirectly perform some functions of fiat currency in circulation and use. Without the approval of relevant departments in accordance with the law and regulations, no unit or individual inside and outside the territory may issue RMB-pegged stablecoins overseas.