Former PBoC chief Zhou pushes back against China stablecoin idea

Former PBoC chief Zhou pushes back against China stablecoin idea

China's former central bank chief, Zhou Xiaochuan, has expressed caution regarding the potential use of stablecoins, contradicting growing calls within China for their adoption. In a mid-July closed-door meeting, Zhou warned about the risks of stablecoins, particularly in terms of financial stability and speculative trading.

Zhou, who served as the governor of the People's Bank of China (PBOC) from 2002 to 2018, argued that stablecoins offer limited cost advantages over China's existing retail payment systems. He noted that these systems, which include third-party payment platforms, the central bank digital currency (CBDC), and clearing infrastructure, have become highly efficient and low-cost [1].

Zhou's remarks come at a time when some experts in China are advocating for the use of yuan stablecoins, citing the potential to strengthen the yuan's global role. However, Zhou highlighted the key concern of price manipulation and emphasized the need for stronger transparency and regulation in financial markets.

He also criticized current regulatory frameworks in the US, Hong Kong, and Singapore, stating that they do not provide sufficient reassurance regarding stablecoins, which are supposed to be fully backed by liquid assets. Zhou warned about the risk of stablecoins being used excessively for speculative asset trading, which could lead to fraud and instability in the financial system [1].

Zhou's stance is aligned with Beijing's longstanding wariness of cryptocurrencies, which are viewed as a threat to stability and capital controls. Chinese regulators have recently instructed local brokers and other bodies to stop promoting stablecoins, citing concerns about their potential use for fraudulent activities [1].

This article was based on a report by Bloomberg, published on August 27, 2025 [1].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-27/former-pboc-chief-zhou-pushes-back-against-china-stablecoin-idea