China explores stablecoin policy in regulatory shift

Shanghai’s State-owned Assets Supervision and Administration Commission held a meeting on July 10, 2025, to discuss potential policies regarding stablecoins and digital currencies.

This marks a notable shift in China’s stance, as cryptocurrency trading has been banned since 2021.

He Qing, the commission’s director, emphasized the need to understand emerging technologies and boost research into digital currencies.

The discussion was driven by requests from major firms like JD.com and Ant Group, which are seeking to create yuan-pegged stablecoins.

These stablecoins aim to reduce dependence on US dollar-linked cryptocurrencies.

Both companies reportedly plan to apply for stablecoin licenses in Hong Kong, where new legislation takes effect on August 1.

The meeting included input from a policy expert at Guotai Haitong Securities, who reviewed global regulatory models and the challenges and opportunities of stablecoins.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ China’s pivot reflects global currency competition, not just crypto adoption

China’s current openness to stablecoins represents a dramatic reversal from its comprehensive 2021 cryptocurrency ban and reflects broader geopolitical competition over digital currency dominance.

The rapid growth of US dollar-backed stablecoins, which now exceed $200 billion in circulation through platforms like Tether and Circle, has created concerns in Beijing about American financial influence expanding through digital means 1.

This shift follows years of China’s “blockchain before Bitcoin” approach, where the government praised blockchain technology while restricting cryptocurrency trading that once represented 95% of global Bitcoin volume 2.

Chinese officials and economists have explicitly framed stablecoin development as a defensive measure, with senior officials expressing concerns that US stablecoins could undermine China’s monetary authority and financial stability 3.

The timing aligns with growing tensions over currency dominance, as China has simultaneously been developing its digital yuan (which has reportedly reached $7.3 trillion in cumulative transactions) but faces challenges in international adoption 1.