Stablecoin issuer / redeemer in China
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is not permitted in China.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- No specific AML/KYC obligations exist for VASPs/stablecoin issuers because the activity is illegal; enforcement operates through the 2021 'Notice on Further Prevention and Control of Virtual Currency Trading Hype Risks' (Circular 237) which classifies virtual currency-related business activities as illegal financial activities.
- The Anti-Money Laundering Law (amended 2024, effective 2025) expanded AML obligations to non-financial sectors, but stablecoin issuance remains outright banned — no compliance pathway exists.
- Authorities (PBOC, CAC, Ministry of Public Security) enforce bans via monitoring, blocking, and criminal penalties under the Criminal Law.
Key Restrictions
- Stablecoin issuance to the public is banned outright under the 2021 joint notice (PBOC, CAC, Supreme People's Court, Ministry of Public Security, et al.) declaring all virtual currency-related business activities illegal.
- Financial institutions are prohibited from supporting crypto activities, including stablecoin issuance, redemption, or reserve custody.
- No licensing or registration regime exists for stablecoin issuers — attempts to operate trigger enforcement actions.
- Foreign-issued stablecoins (e.g. USDC, USDT) cannot be used for payment or financial activity within China.
Key Risks
- Criminal liability under the Criminal Law for operating a stablecoin issuance business in China.
- PBOC, CAC, and Ministry of Public Security actively monitor and crack down on crypto operations; operators face asset freezing, website blocking, and prosecution.
- Tax exposure: despite the ban, Chinese tax authorities may still assess 20% CGT on individuals or 25% CIT on any gains derived from banned activities — but any declared activity would trigger law enforcement.
- Offshore stablecoin issuers that allow Chinese residents to access, buy, or redeem face extraterritorial enforcement risk.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Notice on Further Prevention and Control of Virtual Currency Trading and Related Financial Activities (2021): Issued by PBOC, Cyberspace Administration of China (CAC), Supreme People's Court, Ministry of Public Security, and others. Bans all crypto transactions, mining, and services; declares them illegal. Available at official PBOC site (search "虚拟货币风险提示").
Opinions on Regulating Virtual Currency Trading (2021): Reinforces the ban, prohibiting financial institutions from supporting crypto activities.
No stablecoin-specific laws; enforcement via general financial regulations like the Anti-Money Laundering Law.
Exchanges, custody providers, and payment processors: All banned; no licensing regime exists, as these facilitate prohibited activities like money laundering and capital flight.
Registration vs. licensing: Neither applies—operations are illegal under a prohibition regime, not a registration or licensing framework.
Key requirements: Irrelevant due to the ban; AML/KYC is not mandated for crypto but enforced via monitoring/blocking by financial institutions; no capital or local presence standards for crypto firms.
Application process: None available; attempts to operate trigger enforcement actions.
In September 2021, the People's Bank of China (PBOC) and nine other agencies issued the "Notice on Further Prevention and Control of Virtual Currency Trading Hype Risks" (Circular 237), classifying virtual currency-related business activities as illegal financial activities. This effectively bans all VASP operations, including exchanges, transfers, and custody services, with no licensing or AML compliance pathway available.
China's Anti-Money Laundering Law, amended in 2024 (effective 2025), expanded AML obligations beyond traditional financial institutions to include non-financial sectors and certain traders, while the 2021 'Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading' continues to prohibit financial institutions and payment companies from providing services to virtual asset service providers and criminalizes related activities.
No specific AML/KYC, CDD, or suspicious transaction reporting mandates exist for VASPs in China because such providers are illegal; instead, authorities enforce crackdowns via PBOC, Cyberspace Administration of China (CAC), and Ministry of Public Security.
No search results provide China-specific VASP regulations post-2021 ban; any operations would violate national law, potentially leading to penalties under the Criminal Law of the People's Republic of China.
Individuals face a flat 20% capital gains tax (CGT) on profits from selling, trading, or exchanging crypto (including crypto-to-crypto trades, NFTs, and DeFi activities), calculated as the difference between sale price and acquisition cost in RMB using official exchange rates; this applies regardless of holding period and treats crypto under "property transfer income."
Businesses pay 25% corporate income tax on crypto-related gains.
Offshore crypto holdings are taxable for Chinese tax residents on a worldwide income basis, with no exemption for foreign platforms.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
No — stablecoin issuance to the public is outright banned in China under the 2021 PBOC-led joint notice; no licensing, registration, or compliant pathway exists, and foreign stablecoins are also prohibited from use locally.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?