Since banning all crypto activities in 2021, the Chinese government continues to take measures against the crypto sector. Accordingly, a new process has been initiated to reduce the use of crypto assets like Tether in foreign exchange transactions within the country. Officials reiterated that all types of crypto activities are prohibited within the nation.
Chinese Authorities Issue Warning on USDT
The Supreme People’s Procuratorate (SPP) of China, the highest national institution responsible for legal investigations, has warned the public not to use USDT as an intermediary for trading yuan with other fiat currencies. The agency, in a joint statement with the State Administration of Foreign Exchange (SAFE) on December 27th, called on local authorities to take stricter measures against the use of the popular stablecoin Tether in cross-border currency transactions.
In the announcement, the SPP and SAFE declared that using Tether as an exchange medium between local and foreign currencies is illegal. Officials stated that local branches need to improve coordination to punish fraudulent currency purchases, illegal foreign exchange transactions, and other illegal and criminal activities related to foreign exchange in accordance with the law.
What’s Happening in China?
Chinese officials emphasized that any activity involving cryptocurrency transactions in exchange for yuan, including indirect participation such as providing technical support or exchange services, is illegal. This statement comes more than two years after Chinese authorities imposed a major ban on cryptocurrency activities in the country, including transactions and mining.
Since 2021, local institutions have been pressuring against Tether transactions, and in August 2023, a citizen was sentenced to nine months in prison for purchasing Tether equivalent to 94,988 Chinese yuan worth $13,067.
However, striking reports and precedent-setting court decisions in the Web3 field continue to emerge in the country. The Chinese government’s intense and rigorous work on the issue brings up the possibility of lifting the bans within the crypto community.
