Following its 2021 ban on all cryptocurrency activities, the Chinese government continues to implement measures against the crypto sector. A new initiative has been launched to reduce the use of crypto assets like Tether in foreign exchange transactions within the country. Officials reiterated that all forms of crypto activities are prohibited in China.
China’s Supreme People’s Procuratorate (SPP), the highest national institution responsible for legal investigations, has warned the public against using USDT as an intermediary for trading yuan with other fiat currencies. In a joint statement with the State Administration of Foreign Exchange (SAFE) on December 27, the agency urged local authorities to take stricter measures against the use of the popular stablecoin Tether in cross-border currency transactions.
The SPP and SAFE declared the use of Tether as an exchange medium between local and foreign currencies illegal. They emphasized the need for local branches to enhance coordination to punish fraudulent currency purchases, illegal foreign exchange transactions, and other related criminal activities in accordance with the law.
Chinese officials have stressed that any activities involving cryptocurrency transactions against the yuan, including indirect participation such as technical support or exchange services, are illegal. This statement comes more than two years after China’s significant ban on crypto activities and mining within the country.
Since 2021, local institutions have been clamping down on Tether transactions. In August 2023, a citizen was sentenced to nine months in prison for purchasing Tether worth 94,988 Chinese yuan, equivalent to 13,067 dollars.
Despite the crackdown, China continues to see significant reports and landmark case decisions in the Web3 space. The government’s rigorous and intense approach to the matter is sparking discussions within the crypto community about the possibility of lifting the bans.