People's Bank of China Highlights Crypto Regulation

The People's Bank of China (PBOC), the central bank, emphasized cryptocurrency regulation in its latest annual financial stability report, noting that Hong Kong is "actively exploring" crypto licensing. This comes as the mainland continues to enforce its ban on cryptocurrency trading.

In the 2024 Financial Stability report released on Friday, the PBOC highlighted that 51 jurisdictions globally have imposed bans or restrictions on cryptocurrency assets. Some economies are adjusting existing laws or introducing new legislation to regulate them.

In September 2021, the central bank, alongside several other central authorities, issued a notice prohibiting all crypto trading and mining activities within the mainland. Conversely, Hong Kong has embraced the crypto industry, having officially launched a crypto licensing regime for trading platforms in June 2023, allowing licensed exchanges to offer retail trading services.

The PBOC pointed out that Hong Kong mandates major financial institutions, such as HSBC and Standard Chartered Bank, to include cryptocurrency transactions in their routine customer supervision.

Furthermore, the Chinese central bank is working to enhance an international regulatory framework for crypto assets, as suggested by the Financial Stability Board.

The PBOC stated, "Overall, the connections between crypto activities and systemically important financial institutions, core financial markets, and market infrastructures may be limited. However, cryptocurrencies may pose risks in some economies as the application scenarios of cryptocurrencies in payments and retail investments increase."