China’s Communist Party has identified virtual currencies and blockchain technology as potential channels for corruption, urging officials to intensify efforts to prevent and investigate illicit financial activities involving these technologies.

The directive forms part of a decision approved by the Party’s Central Committee on October 29 during the Fifth Plenary Session of the 20th Central Committee. State-owned news agency Xinhua released the full document on November 1. The announcement focuses on the Party’s broader objective of “full and rigorous Party self-governance,” which seeks to tighten discipline and strengthen oversight within its ranks.

The document references cryptocurrency in its anti-corruption section, calling on authorities to take tougher action against financial misconduct facilitated by digital technologies. According to an English translation, it urges officials to “resolutely crack down on corruption carried out through the internet, virtual currency, cross-border funds, blockchain and the like.”

However, the decision does not specifically identify Bitcoin or outline fresh restrictions on cryptocurrency trading, mining, or stablecoin operations.

It also emphasizes the importance of investigating less visible and increasingly complex forms of corruption. These include anticipated financial gains, secretly arranged proxy ownership, intermediaries commonly described as “white gloves,” and the revolving door connecting government officials with private businesses.

China’s Anti-Crypto Policies Stretch Back More Than a Decade

The latest directive reflects China’s continued efforts to control cryptocurrency-related activities, building on restrictions introduced over the past decade.

In December 2013, the People’s Bank of China (PBOC) and other regulatory authorities prevented banks and financial institutions from handling Bitcoin transactions. The government expanded its restrictions in September 2017 by prohibiting initial coin offerings (ICOs) and cryptocurrency exchanges serving customers in mainland China.

The crackdown became more extensive in September 2021, when the PBOC and several government agencies classified all cryptocurrency transactions as illegal activities. Authorities also stepped up measures against cryptocurrency mining operations.

China has maintained this restrictive regulatory approach through subsequent announcements. A notice issued on February 6 under the central bank’s leadership reiterated that virtual currency-related business activities within mainland China constitute illegal financial operations.

The same notice also prohibited offshore stablecoins pegged to the Chinese yuan and unauthorized tokenization of real-world assets, according to CryptoSlate’s summary of the announcement.

The latest Communist Party decision further highlights Beijing’s concerns about digital assets being used to conceal illicit wealth, facilitate cross-border financial transfers, or disguise corrupt transactions. Nevertheless, it does not establish additional blanket restrictions on individual cryptocurrencies.

Instead, the directive places virtual currencies and blockchain technology within China’s wider anti-corruption campaign, signaling increased scrutiny of how these technologies might be exploited for financial misconduct.