The Role of China’s Central Bank in Shaping Cryptocurrency Policies in

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The central role of the entity[“organization”, “People’s Bank of China”, 0] (PBOC) in shaping cryptocurrency-policy in China reflects a complex and evolving interplay between innovation, risk-control and state sovereignty. From the earliest regulatory interventions against initial coin offerings (ICOs) and trading platforms, to the aggressive ban on mining operations and the development of a national digital currency, the PBOC has driven the narrative. This article explains how the PBOC enforces prohibitions, advances its own digital-fiat agenda, and engages internationally to shape the future of virtual assets in line with China’s monetary and financial strategy.

Enforcement of prohibitions and risk management

China’s central bank has taken a strict stance on privately issued cryptocurrencies, deeming them a threat to financial stability, facilitating money-laundering and undermining capital controls. citeturn0search11turn0search10turn0search13 In September 2021 the PBOC and other regulators declared all crypto-asset trading illegal. citeturn0search10turn0search8turn0search9 By shutting down domestic exchanges, banning new account registrations and ordering exits, the PBOC has asserted its supervisory reach. citeturn0search3turn0search0 This enforcement demonstrates the bank’s priority: preserving monetary sovereignty and reducing systemic risk.

Development of the digital yuan and regulatory innovation

Rather than merely banning crypto, the PBOC has been actively developing a central-bank-issued digital currency (CBDC) — the so-called digital yuan or e-CNY. citeturn0search15turn0search9turn0search8 Through this vehicle, the central bank retains control of issuance, monetary policy and payments infrastructure. At the same time, the PBOC is exploring how digital currency fits into a multipolar global financial architecture. citeturn0search5turn0search8 The digital yuan platform underscores China’s ambition to shape not only domestic cryptocurrency policy but also the digital future of money globally.

International coordination and future prospects

On the international front, China’s central bank is participating in cross-border digital currency initiatives and adjusting stablecoin and crypto-asset regulation in global context. citeturn0search4turn0search12turn0search8 While maintaining a domestic ban on anonymous crypto trading, the PBOC is watching developments in stablecoins and digital assets in Hong Kong and elsewhere, signalling possible future regulatory adaptations. citeturn0search8turn0search12 The bank’s role goes beyond prohibition: it shapes frameworks for recognition of virtual assets, disposal of seized tokens, and alignment with China’s broader financial strategy. citeturn0search17

In summary, the PBOC stands at the centre of China’s cryptocurrency-policy architecture: enforcing prohibitions on decentralized crypto, advancing state-controlled digital currency, and coordinating international engagement. Its approach reflects the priorities of monetary sovereignty, systemic risk control and technological leadership. For observers of global crypto regulation, China’s model — where the central bank is prime mover — provides a distinctive and influential template.

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