The People's Bank of China has officially banned all privately issued Peg stablecoins and upgraded e-CNY to interest-bearing "digital deposits" starting in early 2026.
The People's Bank of China (PBOC), in coordination with seven government agencies, announced a comprehensive ban on stablecoins pegged to the yuan on February 6th. This move marks a new escalation in Beijing's strategy to control digital currencies, as the authorities decide to completely eliminate privately issued digital Token that mimic the national legal tender.
The new regulations prohibit any individual or organization, domestic or foreign, from issuing stablecoins linked to the RMB without official approval. The PBOC argues that these digital currencies “perform some functions of fiat currency in disguise during circulation,” thus creating risks to the national financial system.
Winston Ma, a lecturer at New York University Law School and former CEO of the national investment fund China Investment Corporation, explained that the ban applies to both CNH (foreign exchange yuan) and CNY (domestic yuan). According to him, this is part of a long-term strategy to push speculative crypto assets out of the mainstream financial system while strengthening the position of e-CNY.
E-CNY is transforming itself as a digital deposit.
The ban coincides with the PBOC's significant upgrade of e-CNY. From January 1, 2026, the digital yuan will officially be reclassified from a "cash substitute" to a "digital deposit." This change allows commercial banks to pay interest to holders of e-CNY in verified wallets, at a rate equivalent to regular demand deposits.
Digital wallets are also included within the scope of national deposit insurance, creating a significant competitive advantage over any private stablecoin. By offering profitability and legal protection, the Chinese authorities have eliminated the main incentive for users to seek alternatives offered by the private sector.
This decision completely reverses signals of openness that emerged in August 2025, when reports suggested Beijing might allow private companies to develop stablecoins. However, by September of the same year, officials had instructed developers to suspend all testing programs, signaling a clear shift in stance.
The enforcement mechanism of the new regulation is also extremely strict. The Ministry of Industry and Information Technology established “joint liability,” holding technology companies, marketing firms, and payment service providers legally responsible if they support unauthorized stablecoin or Tokenize asset projects, even if the project operates overseas.
The China Securities Regulatory Commission also warned that Token Issuance real assets without a license could be prosecuted as an illegal public offering of securities. The agency stressed that private Tokenize models cannot guarantee legal rights or legitimate ownership under Chinese law, indicating that Beijing views this as a potential threat to national financial stability.
