China Cracks Down on Stablecoin Promotion Amid Regulatory Tightening

Chinese authorities have intensified regulatory scrutiny of stablecoin-related activities, instructing local brokerages and financial institutions to cease seminars, research publications, and promotional efforts linked to stablecoins [1][2]. The crackdown, which began in late July and continued into August 2025, aims to mitigate the risks of speculative trading and potential fraud within the digital asset space [1]. Reports indicate that local firms have been directed to halt all promotional content and academic research that endorses or advocates for stablecoin use, including online webinars, white papers, and public lectures [1][4].

This move reflects a broader regulatory tightening following a surge in stablecoin interest among Chinese investors. Regulators have adopted a more cautious stance, emphasizing the need for tighter control to prevent financial instability [3]. Reuters and Cryptonews reported that major brokerage firms were specifically targeted, with orders to stop issuing research reports promoting stablecoins [5]. This follows previous warnings from Chinese regulators about the risks of financial misconduct and excessive speculation in the sector [5].

Analysts suggest that the regulatory actions may signal broader concerns about capital outflows and the potential erosion of monetary policy effectiveness. The Chinese government has maintained a strict stance on digital currencies, having previously banned cryptocurrency trading and initial coin offerings in 2017 [1]. The recent measures extend this approach, now including stablecoins within the regulatory framework [2][4].

Despite domestic restrictions, China has shown selective support for stablecoin initiatives outside its borders. Hong Kong, often seen as a regulatory sandbox for the country, has implemented a new stablecoin issuance framework with a six-month transition period and special rules [1]. Standard Chartered, HSBC, and Bank of China (Hong Kong) have been authorized to issue physical Hong Kong dollars and are now involved in Hong Kong-dollar-backed stablecoin projects [1]. In July 2025, JD.com and Ant International also announced plans related to potential stablecoin launches [1].

Offshore yuan-backed stablecoins are another area of focus. Chinese blockchain firm Conflux introduced a third version of its public network with a new stablecoin backed by offshore yuan, while AnchorX received in-principle approval for a yuan-pegged stablecoin from Kazakhstan’s regulator [1]. These initiatives aim to serve offshore Chinese entities and countries participating in the Belt and Road Initiative, rather than domestic users.

The global regulatory environment for stablecoins is also evolving, with examples such as New York’s $26.5 million fine against Paxos highlighting a broader trend of increased oversight [7]. In the U.S., SEC Commissioner Hester Pierce has emphasized the importance of privacy-focused regulation and the potential of blockchain technology [8]. Despite these developments, China appears committed to maintaining a controlled environment for financial innovation within its jurisdiction [2].

[1] Cointelegraph. (2025). Chinese regulators urge local businesses to stop stablecoin promotion. https://cointelegraph.com/news/chinese-regulators-urge-local-businesses-to-stop-stablecoin-promotion

[2] AInvest. (2025). China Cracks Down on Stablecoin Promotion Amid Global. https://www.ainvest.com/news/china-cracks-stablecoin-promotion-global-regulatory-divergence-2508/

[3] Bloomberg. (2025). Is China backing out of its stablecoin push? Regulators. https://crypto.news/is-china-backing-out-of-its-stablecoin-push-regulators-reportedly-move-to-cool-market-frenzy/

[4] Cryptonews. (2025). China Orders Brokers to Halt Stablecoin Promotion Amid. https://cryptonews.com/news/china-orders-brokers-to-halt-stablecoin-promotion-amid-risk-concerns/

[5] MSN. (2025). China tells brokers to halt endorsements of stablecoin. https://www.msn.com/en-us/money/markets/china-tells-brokers-to-halt-endorsements-of-stablecoin-sources-say/ar-AA1K9FlX?ocid=finance-verthp-feeds

[7] AllSides. (2025). NYDFS Fines Stablecoin Issuer Paxos $26.5M for. https://www.allsides.com/news/2025-08-07-0900/technology-nydfs-fines-stablecoin-issuer-paxos-265m-compliance-failures-tied

[8] Blockhead.co. (2025). SEC's Hester Pierce Champions Financial Privacy in Rousing Speech. https://www.blockhead.co/2025/08/07/secs-hester-pierce-champions-financial-privacy-in-rousing-speech/