Analysis of the People's Bank of China's Stance on Virtual Currencies After the 1128 Meeting

Key Takeaways from the 1128 Meeting

• Reiteration of China's firm stance against virtual currency trading and speculation.
• Emphasis on restricting the use of stablecoins in illegal foreign exchange activities.
• Limited impact on global cryptocurrency prices.
• No change in Hong Kong's policy towards virtual assets.

On November 28, 2025, the People's Bank of China (PBOC), in conjunction with more than ten departments, convened a coordination meeting on combating virtual currency trading and speculation (hereinafter referred to as the 1128 Meeting). The meeting emphasized the need to continue adhering to the provisions of the 2021 Notice on Further Preventing and Disposing of Risks Related to Virtual Currency Trading and Speculation (hereinafter referred to as the 9.24 Notice). For virtual money in general in mainland China, the 1128 Meeting is essentially a rehashing of old information. Even self-media outlets in the crypto space, desperately trying to gain attention, could only extract one sentence from the lackluster information flow: "Stablecoins are also virtual currencies."

But this raises serious questions: In the 9.24 Notice issued in 2021, the PBOC clarified that Tether (USDT) is a type of virtual currency. Although the term "stablecoin" was not used, there was no dispute or misunderstanding among market participants about the prohibition of operating stablecoin-related businesses in mainland China. So, what are the key points of the 1128 Meeting? What are the real impacts it will have on the industry?

What are the Key Points of the 1128 Meeting?

When the 9.24 Notice was issued in 2021, Bitcoin (BTC) prices immediately plummeted. Although exchanges were contacting lawyers for advice, they were also making emergency arrangements to move their businesses overseas. However, after the 1128 Meeting, BTC prices saw no significant changes, indicating a limited impact. The reason for the lack of significant attention to the 1128 Meeting is the scarcity of new information and the limited details released. It is difficult for non-industry long-term practitioners to grasp the true purpose of this meeting.

The team believes that the 1128 Meeting focused on two objectives:

1. "Readjustment" of the judicial judgment trend.
2. Strict restrictions on the use of stablecoins in illegal foreign exchange activities.

"Readjustment" of the Judicial Judgment Trend

With the expansion of the virtual currency market and the increase in related transactions, various civil disputes are becoming more frequent. More and more people are resorting to courts for judicial relief regarding civil disputes related to virtual currencies. Under this background, the courts in China have gone through two stages:

• 2021-2022: The early stages of implementing the 9.24 Notice. Chinese courts categorically ruled all crypto-related legal actions as invalid (including exchanges, transactions, custody, investment related to cryptocurrencies, as well as marginal legal actions related to cryptocurrencies, such as the sale of mining machines and custody contracts).
• 2023 to the present: With the increase in relevant judicial practices, Chinese courts have gained a deeper understanding of virtual currencies. A large number of scholars and participants in judicial practices began to question and criticize the previous "one-size-fits-all" approach. The main reason is that with the abandonment of Proof-of-Work (PoW) technology by many major blockchains, virtual currency mining is no longer as energy-intensive or environmentally polluting as before.

Strict Restrictions on the Use of Stablecoins in Illegal Foreign Exchange Activities

China imposes a strict foreign exchange control system, typically limited to $50,000 USD per person per year. The expansion of the stablecoin market and the increasing number of merchants have solved much of the demand for outbound financial flows through stablecoins like USDT and USDC.

Impact of the 1128 Meeting on the Industry

The 1128 Meeting had minimal impact on the crypto market. However, data suggests that China's contribution to the computing power of major blockchains is increasing, and related businesses are returning to the mainland. The 1128 Meeting signals that Chinese regulators' policies are ongoing.

The 1128 Meeting will not affect Hong Kong's policy towards virtual assets. Hong Kong and the mainland have gradually formed a basic pattern of openness and restriction regarding virtual assets.