China Cracks Down on Stablecoin Promotion Amid Speculation Fears

Chinese authorities have directed local firms to cease promoting, researching, or hosting seminars related to stablecoins, according to multiple sources. The move, which began in late July and continued into August, is aimed at curbing speculative activity and preventing the misuse of stablecoins in fraudulent schemes [1][2]. Regulators have reportedly asked brokerages, research institutions, and related entities to halt all internal and public-facing activities that could fuel public interest in stablecoins [1].

The crackdown aligns with broader regulatory efforts to tighten control over digital assets. Chinese banks are already required to monitor and flag suspicious transactions involving crypto assets, including those linked to cross-border gambling and informal financial networks [2]. Authorities are concerned that stablecoins, despite their perceived stability, could become tools for retail investors to engage in high-risk speculation without fully understanding the associated risks [3]. Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. in Singapore, noted that Beijing appears to be trying to prevent a speculative surge and the potential for herd behavior among less-informed investors [3].

While the mainland remains firmly against public engagement with stablecoins, China is not entirely abandoning the concept. Officials are reportedly exploring the development of a yuan-pegged stablecoin to reduce the global dominance of the U.S. dollar [4]. These discussions are taking place behind closed doors, with policymakers reportedly consulting experts on design and implementation. Meanwhile, private companies such as JD.com and Ant Group are reportedly engaging with regulators to advocate for the issuance of stablecoins to promote the international use of the yuan [4].

Hong Kong has emerged as a key testing ground for these ideas. The territory has introduced a new stablecoin issuance framework with a six-month transition period, allowing for more structured development within a controlled regulatory environment [2]. Standard Chartered’s Hong Kong branch, for example, announced a partnership with Web3 firm Animoca Brands to develop a Hong Kong-dollar stablecoin. The bank is one of only three institutions authorized to issue physical Hong Kong dollars under Hong Kong Monetary Authority oversight [2].

In parallel, JD.com has registered entities potentially linked to a stablecoin rollout, while Ant International, a Singapore-based unit of Ant Group, is reportedly seeking stablecoin licensing in Hong Kong and Singapore [2]. Jingdong Coinlink Technology Hong Kong also announced plans to issue a Hong Kong dollar-backed stablecoin in the summer of 2024. These initiatives reflect a broader strategy to position stablecoins as tools for global financial influence, particularly in markets aligned with China’s Belt and Road Initiative [4].

Despite the domestic restrictions, China is actively participating in the global stablecoin landscape. For example, blockchain firm Conflux introduced a stablecoin backed by offshore Chinese yuan, and AnchorX has received in-principle approval from Kazakhstan’s regulator to issue a yuan-pegged stablecoin [4]. These stablecoins are designed for international use and are not intended for circulation within mainland China.

The regulatory divergence between China and other jurisdictions is notable. While the country continues to enforce strict domestic controls, there are early signs of a potential reevaluation of its broader digital asset strategy. This comes as other regions, including the U.S. and Hong Kong, move toward formal recognition of stablecoins through legislative and regulatory measures [4].

China is also advancing its own digital currency initiative—the digital yuan, or e-CNY. Earlier this year, PBOC Governor Pan Gongsheng outlined plans to establish an international operations center for the digital yuan in Shanghai, signaling a long-term vision of a global financial system less reliant on the U.S. dollar [4].

Though no official timeline has been released for a yuan-backed stablecoin, the combination of internal discussions, regulatory easing, and strategic global partnerships suggests that China’s digital asset strategy is evolving. For now, the government appears to be prioritizing risk management and public education, even as it explores the broader opportunities that stablecoins present in the global financial system [4].

Source:

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

[2] AInvest, [https://www.ainvest.com/news/china-cracks-stablecoin-promotion-global-regulatory-divergence-2508/](https://www.ainvest.com/news/china-cracks-stablecoin-promotion-global-regulatory-divergence-2508/)

[3] Cryptonews, [https://cryptonews.com/news/china-orders-brokers-to-halt-stablecoin-promotion-amid-risk-concerns/](https://cryptonews.com/news/china-orders-brokers-to-halt-stablecoin-promotion-amid-risk-concerns/)

[4] Financial Times, [https://www.ft.com/?catid=12%3Acourses&post=%40linkedinurl?id=314%3Aeuropean-law](https://www.ft.com/?catid=12%3Acourses&post=%40linkedinurl?id=314%3Aeuropean-law)