Lawyers interpret the "1128" regulatory policy: focusing on regulating illegal foreign exchange transactions using stablecoins.

According to Mars Finance, on December 1st, the People's Bank of China, along with more than ten other departments, held a coordination meeting on combating virtual currency trading and speculation on November 28th (hereinafter referred to as the "1128 Meeting"). The meeting emphasized the continued adherence to the relevant provisions of the 2021 "Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation" (hereinafter referred to as the "9.24 Notice"). The meeting stressed the prohibition of commercial virtual currency business in mainland my country and specifically addressed the crackdown on money laundering and illegal capital outflows using virtual currencies. Lawyer Xiao Sa interpreted this policy as a reiteration of previous statements, but the real target for regulation this time is the illegal exchange of foreign currency using stablecoins, a practice that severely disrupts financial order. As is well known, my country has a relatively strict foreign exchange control system, generally limiting each person to no more than US$50,000 per year. With the gradual expansion of the stablecoin market, the continuous expansion of application scenarios, and the surge in the number of cryptocurrency traders, many capital outflow needs have been met by stablecoins such as USDT and USDC. Even more egregiously, stablecoins can be used to facilitate money laundering or conceal the proceeds of crime for upstream criminal activities. Furthermore, in judicial practice, there have been instances of audacious foreign trade merchants using USDT and USDC to circumvent UN sanctions resolutions and assist sanctioned countries in their foreign trade. From a judicial perspective, in the past year or two, Chinese judicial authorities have gradually increased their regulation of cryptocurrency traders, with many being convicted and punished for illegal business operations, aiding and abetting fraud, money laundering, and concealing the proceeds of crime. In addition, lawyer Xiao Sa believes that the November 28th meeting will not affect Hong Kong's open policy towards virtual assets. Hong Kong and mainland China have gradually formed a basic framework of one open and one restrictive approach to virtual assets, with a clear regulatory attitude: financial innovation is not prohibited, but innovation must be carried out in designated areas.