Stablecoins are not considered "contraband" under criminal law.

Zhao Binghao, Dean of the Institute of Financial Technology and Law at China University of Political Science and Law, pointed out that the People's Bank of China's explicit classification of stablecoins as virtual currencies does not mean that stablecoins are "prohibited items" in the sense of criminal law.

Recently, the People's Bank of China held a meeting of the coordination mechanism for combating virtual currency trading and speculation, and for the first time explicitly stated that stablecoins are a form of virtual currency. The meeting pointed out that stablecoins cannot effectively meet the requirements for customer identification, anti-money laundering, etc., and pose a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers. Zhao Binghao, Dean of the Institute of Financial Technology and Law at China University of Political Science and Law, interprets this as meaning that the central bank's definition does not classify stablecoins themselves as "contraband" in the sense of criminal law, but rather includes the commercial, intermediary, and clearing activities surrounding stablecoins within the scope of regulation. The central bank's characterization of stablecoins continues my country's consistent strict regulatory policy on virtual currencies. The meeting reiterated that virtual currencies do not have the same legal status as legal tender, do not have legal tender status, and should not and cannot be used as currency in the market. Dean Zhao Binghao clarified the legal boundaries of this regulatory characterization: The core issue lies in regulating various business activities surrounding stablecoins, rather than prohibiting stablecoins themselves. Stablecoins can achieve dollar-like instant settlement on-chain, bypassing the traditional banking system and foreign exchange controls. Large-scale use could weaken the status of local currencies in pricing and settlement. Against the backdrop of tightening domestic regulations, stablecoin-related technologies and liquidity will increasingly migrate to offshore and regional financial centers. The "imagination space" for domestic institutions deploying stablecoins overseas will be infinitely narrowed, and they will be more limited to practical applications such as cross-border payments and supply chain finance. With the central bank's explicit inclusion of stablecoins within the regulatory framework for virtual currencies, it has become an industry consensus that the development space for stablecoins in China will continue to shrink.