The bill for the Chinese digital currency could criminalize all stablecoins linked to the yuan.
The Chinese central bank, also known as the People’s Bank of China (PBOC), presented a bill on Friday to create a legal framework for the digital yuan, the central bank’s own digital currency (CBDC)
In this regard, the draft first states that the Bitcoin Profit is the official national currency of the People’s Republic of China, whether in physical or digital form.
With this, the central bank communicates, among other things, sovereignty over its own currency and therefore puts a stop to crypto projects of third parties who want to link their digital currencies to the yuan. Both individuals and companies are said to be banned from issuing digital currencies that could „replace“ the yuan.
This would mean that all stablecoins that are linked to the yuan would automatically be illegal
The penalties for violating this law are severe. All profits will be confiscated, all units of the respective digital currency will be destroyed and a fine will be levied that corresponds to five times the value of the original amount in circulation. There is also the risk of prosecution and imprisonment.
The Chinese central bank emphasizes that the draft is open to public feedback until November 23.