8-8-2025 – Chinese financial regulators have directed local brokerages and think tanks to cease all stablecoin-related research and promotional activities, citing risks of fraud and market instability, first reported by Bloomberg. The guidance, issued in late July and early August, aims to curb speculative interest in stablecoins amid growing public enthusiasm for digital assets.
The move reflects Beijing’s cautious approach to cryptocurrencies, despite a 2021 ban on crypto trading. Authorities are concerned that stablecoins, often pegged to fiat currencies like the U.S. dollar, could be exploited for fraudulent schemes or fuel a speculative frenzy among retail investors. Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp., noted that regulators aim to prevent a “herd rush” into assets that many investors may not fully understand.
Meanwhile, over-the-counter crypto trading remains active, with Chainalysis estimating $75 billion in transactions in the first nine months of 2024.In contrast, Hong Kong is advancing its stablecoin framework, with new licensing rules effective August 1, positioning the city as a digital asset hub.
This divergence highlights China’s strategy of restricting mainland crypto activity while allowing controlled experimentation in Hong Kong, where firms like JD.com are exploring yuan-backed stablecoins.The clampdown may temper mainland enthusiasm but is unlikely to halt global stablecoin growth, projected to reach $3.7 trillion by 2030. Observers will watch how China balances its digital yuan ambitions with these restrictions.
