- China bans unapproved yuan-pegged stablecoins offshore, impacting markets.
- PBOC and seven departments enforce the regulation.
- Effort to curb money laundering and boost e-CNY use.
The People’s Bank of China and seven government departments banned unapproved yuan-pegged stablecoins issuance on February 6, 2026, reinforcing restrictions on virtual currencies like BTC, ETH, and USDT.
This ban intensifies China’s control over financial operations amid e-CNY promotion, significantly impacting BTC, ETH, and SOL prices with immediate market reactions evident.
China has intensified its cryptocurrency regulation by officially banning the offshore issuance of unapproved yuan-pegged stablecoins.
This move aligns with the nation’s ongoing efforts to regulate digital currencies and bolster the digital yuan’s status.
The People’s Bank of China, alongside seven key departments, issued a joint directive prohibiting unapproved stablecoins and related activities. This notice, effective February 6, 2026, underscores China’s firm stance against unauthorized virtual currencies.
“The Beijing crypto ban rule applies across all RMB-related markets, whether CNH or CNY… This is the latest step in a multi-year project: Keep speculative crypto outside the formal financial system, while actively promoting the usage of e-CNY.” — Winston Ma, Adjunct Professor, NYU Law School, former Managing Director, CIC
The immediate impact on cryptocurrency values was substantial, as major coins such as BTC and ETH experienced significant price drops. This decision by China aims to control capital flows and mitigate financial risks associated with unregulated assets.
Financial implications extend beyond market volatility, as China’s efforts also include preventing money laundering and fraud. Experts suggest these regulations enhance monetary sovereignty, aligning with China’s promotion of its state-backed digital currency.
This regulatory action reflects China’s evolving approach toward digital finance, emphasizing a controlled environment. Despite previous interest, the government’s focus remains firm on discouraging speculative activities that could destabilize its financial framework.
Potential outcomes include a shift towards regulated digital finance, echoing historical trends of increasing central oversight. The bold strategy could encourage global regulatory standards as countries observe its long-term efficacy.
