Pan Gongsheng's remarks at the Financial Street Forum were powerful and decisive, signaling that the Chinese crypto market is about to face its most severe winter yet.
“The People’s Bank of China will continue to work with law enforcement agencies to crack down on the operation and speculation of virtual currencies within the country.” On October 27, Pan Gongsheng, Governor of the People’s Bank of China, made this statement at the 2025 Financial Street Forum Annual Conference, stirring up waves in the already dormant domestic crypto market.
Unlike before, Pan Gongsheng specifically pointed out that the IMF and World Bank Annual Meetings have also made stablecoin risks a core topic, indicating that a global regulatory storm is brewing.
I. Policy Interpretation: The Sword of Regulation Unsheathed Again
Pan Gongsheng’s speech conveyed three clear signals:
● First, existing policies will not only be continued but also strengthened. He specifically emphasized that the various regulatory documents issued since 2017 “are still valid,” meaning that all regulatory measures from the ICO ban to the withdrawal of trading platforms will continue to be enforced.
● Second, the scope of the crackdown is expanding. The central bank made it clear that it “will work with law enforcement agencies” to take action, indicating that in the future, not only financial regulators but also public security and judicial forces will be deeply involved, forming a multidimensional crackdown network.
● Most importantly, international regulatory coordination is being strengthened. Pan Gongsheng revealed that at the recently held IMF and World Bank Annual Meetings, stablecoin risks have become the focus of discussion among finance ministers and central bank governors from various countries. This shows that China’s regulatory stance is fully aligned with international trends. A person close to the regulators revealed: “This statement is by no means routine, but is paving the way for stronger enforcement actions to come.”
Time Node | Policy Highlights | Market Impact |
September 2017 | First halt of ICOs, closure of virtual currency exchanges | Comprehensive withdrawal of domestic trading platforms |
May 2021 | Three associations issued warnings on virtual currency trading risks | Strengthened investigation of banking payment channels |
September 2021 | Ten departments jointly issued a document clarifying that virtual currency-related businesses are illegal financial activities | Comprehensive ban on overseas exchanges providing services to domestic users |
2023-2024 | Continued crackdown on mining activities, clearing cross-border trading services | Computing power outflow, OTC trading becomes more hidden |
October 2025 | Pan Gongsheng reiterates crackdown stance, emphasizes stablecoin risks | Further curbing disguised participation channels |
II. Market Impact: The Crypto Market Faces a Life-or-Death Test
● The “penetrative” nature of regulation is reshaping market risk perception. “The market’s biggest concern is regulatory ‘penetration’,” said crypto hedge fund manager Zhang Ye. “The previous approach of evading regulation through overseas structures is becoming increasingly unworkable. The current regulatory logic has shifted from cleaning up domestic public platforms to comprehensive, penetrative regulation of capital flows and information flows.” This means that regardless of where the trading entity or server is located, as long as the starting or ending point of the capital chain is domestic, its risks are difficult to avoid. This blocking of underlying channels is fundamentally changing the rules of the market game.
● On-chain data is equally pessimistic. According to Chainalysis monitoring, crypto trading volume within China has dropped to its lowest point since 2020 in the past month, down nearly 30% month-on-month. Meanwhile, the proportion of stablecoins in cross-border capital flows has risen against the trend, which is exactly the direction regulators are focusing on.
● In terms of capital flows, domestic capital outflow channels are being comprehensively tightened. This move directly responds to and implements Governor Pan Gongsheng’s statement that “will continue to crack down in cooperation with law enforcement agencies.” Regulators aim to build a defense line from the payment and settlement end, fundamentally squeezing the living space of virtual currency trading.
● From an industry ecosystem perspective, the domestic blockchain industry is undergoing a “de-cryptofication” transformation. More and more startup teams are turning to consortium chains and the digital RMB ecosystem, drawing a clear line from virtual currency speculation.
III. Perspectives: Where Will Market Participants Go?
Chen Hao, Director of “Blockchain Frontier” Research, analyzes:
● “Governor Pan’s speech actually drew a clear red line for the market—technology can be explored, but speculation is absolutely intolerable. This means that the domestic blockchain industry will completely bid farewell to the ‘coin speculation’ mentality and shift to real industrial applications.”
Kevin Li, digital asset analyst at international investment bank “Gree Group”, believes:
● “The Chinese government’s stance is influencing the global regulatory direction. We have noticed that regulatory agencies in many countries, including the US SEC, are re-evaluating the regulatory framework for stablecoins. In the next 6-12 months, there may be a tightening of regulations globally.”
Veteran miner Wang Wei’s personal experience:
● “We moved our mining farms overseas as early as 2021, and now it seems that was a very wise decision. Domestic regulation has not relaxed, but has instead continued to intensify. The remaining space will only get smaller and smaller.”
IV. Risk Warning: Investors Must Beware of These Red Zones
● Policy risks are escalating. Pan Gongsheng’s explicit use of “in cooperation with law enforcement agencies” means that joint enforcement actions may be taken in the future, and the scope of criminal crackdowns will be further expanded.
● Cross-border risks cannot be ignored. As global regulatory consensus forms, the previous model of trading through overseas platforms will also face challenges. Major economies are establishing regulatory information sharing mechanisms, and cross-border capital flows will be subject to stricter monitoring.
● Technology substitution risks have already emerged. The rapid development of the digital RMB is functionally replacing stablecoins. It is reported that the central bank has established a digital RMB international operation center in Shanghai, and the construction of the related ecosystem is clearly accelerating.
The table below lists the regulatory trends that investors need to pay special attention to:
Risk Area | Specific Manifestation | Impact Level |
Domestic Trading | Joint crackdown by law enforcement agencies, possible criminal liability for those involved | Extremely High |
Cross-border Capital | Payment channels continue to tighten, large numbers of OTC merchants exit | High |
Stablecoins | Global regulation is tightening, usage scenarios are limited | Medium-High |
Information Dissemination | Related marketing, training, and media content are being cleared | Medium |
V. Where Is Spring After the Winter?
In the coming quarters, investors should focus on two core trends:
● First is the regulatory progress on stablecoins by major economies. Especially after the IMF and World Bank Annual Meetings, whether the US, EU, Japan, etc. will introduce more binding regulatory frameworks will determine the liquidity environment of the global crypto market.
● Second is the pace of digital RMB advancement. The People’s Bank of China has established digital RMB operation centers in Beijing and Shanghai, and related pilot application scenarios are expanding rapidly. The digital RMB ecosystem may become the next investment hotspot, but it must be strictly distinguished from virtual currency speculation.
● “The value of blockchain technology will not disappear because of regulation, but the development path will inevitably change.” An experienced industry observer pointed out, “The future belongs to those technological innovations that can serve the real economy and comply with regulatory requirements, not to various well-packaged speculative games.”
