China hardens its offensive against stablecoins as Bitcoin falls below $86,000

Source: CritpoTendencia Original Title: China toughens its offensive against stablecoins as Bitcoin falls below $86,000 Original Link: Bitcoin deepens its correction in the last hours and is trading at $85,888, a daily drop of 5.47%, according to CoinMarketCap. The market capitalization falls to $1.71 trillion and the volume surges 49.57% to $56.58 billion, signaling an accelerated exit from positions in the midst of a global environment of increased risk aversion.

Evolution of Bitcoin price in the last 24 hours

In parallel to the decline of BTC, China sent one of its most forceful signals of the year against cryptocurrencies. At the meeting of the interinstitutional mechanism to supervise the trade of virtual currencies, representatives from the People's Bank of China (PBOC), the Ministry of Public Security, and the Office of Cyberspace Affairs warned about a resurgence of speculative trading that introduces new risks to financial stability.

The message was clear: virtual currencies do not have legal status equivalent to fiat money and should not be used in the market as currency. All activities related to this use will be treated as illegal financial operations.

The focus of this new stage of supervision is stablecoins. The PBOC stated that, as a form of virtual currency, they do not meet customer identification requirements or safeguards against money laundering, which makes them potential vehicles for fraud, illegal cross-border operations, and illicit financing. Therefore, they will formally fall within the framework of prohibited financial activities in Chinese territory.

A blow to the risk sentiment in an already pressured market

China's regulatory tightening comes at a particularly sensitive time for the market. BTC lost support levels it had been defending since last week in the last few hours, and the increase in selling volume confirms a short-term bearish pressure scenario.

With an FDV of $1.8 trillion and a volume/capitalization ratio of 3.3%, the market reflects a sharp shift towards defensive positions.

Chinese authorities indicated that they will strengthen institutional coordination, information exchange, and law enforcement to maintain their ban on the use of virtual currency within the financial system.

At the end of October, the governor of the PBOC, Pan Gongsheng, had already pointed out that stablecoins issued by private institutions are still in an early stage and laden with potential risks. The country's stance continues to be one of high caution.

While Chinese measures do not directly affect BTC infrastructure, they do amplify global risk sentiment at a time of technical fragility.

The conjunction of accelerated sales and a stricter regulatory tone in the second largest economy in the world creates a complex environment for digital assets, at least in the very short term.