China Crypto Regulation Sees Growing Push for Yuan-Based Stablecoin

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China is showing fresh signs of interest in digital currencies. Although crypto is banned, the interest hasn’t faded. From regulators to tech giants, enthusiasm for digital currencies, especially stablecoins, is heating up fast. A recent report from Reuters shows that Chinese regulators are renewing their focus on the sector.

Shanghai Officials Explore Stablecoin Strategy

This week, the Shanghai State-owned Assets Supervision and Administration Commission held a key meeting with local officials to explore strategic responses to stablecoins and digital currencies. This shows a shift in tone in the country’s approach. 

He Qing, head of the Shanghai regulator, stressed the need to pay closer attention to new technologies and to do more research on digital currencies. The meeting was attended by about 60–70 people. Since Shanghai is China’s main financial center, it often takes the lead in testing new government policies and regulatory changes.

At the meeting, a policy expert from Guotai Haitong Securities broke down the basics of cryptocurrencies and stablecoins, discussed the global regulatory trends, highlighted the risks and opportunities of stablecoins, and offered policy advice for digital assets growth. 

Tech Giants Push For Yuan-based Stablecoin

China tech giants like JD.com and Ant Group are also urging the central bank to allow Yuan-based stablecoins to compete with US-dollar-backed crypto. Both companies plan to apply for licenses in Hong Kong, where new stablecoin rules take effect on August 1. 

Stablecoins are gaining global momentum. With the U.S. ahead with advanced crypto regulations, major companies like Amazon and Walmart are also exploring stablecoin projects.  

Crypto Hype Meets Warning Signs 

However, making changes in China will not be easy. Just last month, central bank governor Pan Gongsheng warned that the rise of digital currencies and stablecoins brings major regulatory challenges. China banned crypto trading and mining in 2021 over concerns about financial stability.

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Recently, a Chinese industry group has warned investors about scams linked to stablecoins. The Beijing Internet Finance Association said some groups are using the hype around stablecoins to promote fake high-return schemes disguised as financial innovation.

The association has warned that these activities can quickly turn into crimes like illegal fundraising, fraud, pyramid schemes, and money laundering.

Rising Interest in Digital Assets 

But the surge in interest is clear as an index tracking stablecoin-related stocks in China has jumped 88% over the past three months. A similar index in Hong Kong has more than doubled.

Digital currencies are gaining ground fast. Bitcoin has been breaking records lately. Just today, it is up over $118,000, hitting a record high. Many experts predict it to reach $150K-$200K by the year end.