- Chinese regulators have told local firms to stop publishing research and holding seminars about stablecoins.
- Authorities are concerned stablecoins could be used for fraud and want to prevent speculative behavior among investors.
- China continues to enforce strict digital asset rules at home but supports stablecoin development in Hong Kong and for international use.
- Hong Kong is implementing a new stablecoin framework, with several major banks involved in issuing Hong Kong dollar stablecoins.
- Yuan-backed stablecoins are being launched for offshore use and are connected to China’s global Belt and Road Initiative.
Chinese regulators have directed domestic companies to halt the publication of research and the organization of seminars related to stablecoins. This instruction follows growing concerns that stablecoins could be used as instruments for fraudulent financial activities, according to a recent report.
Regulators have reportedly told local brokers and other firms to cancel both seminars and promotional efforts connected to stablecoin research. The move is intended to limit risks associated with retail investment surges in the sector, as officials say stablecoins may be misused for scams.
Christopher Wong, a currency strategist at Oversea-Chinese Banking Corporation, commented that officials are concerned about uninformed investors. “There’s still a worry that not everyone knows adequately about crypto and policymakers, being pragmatic, don’t want herd mentality when investors buy into something that they do not know what the risks are,” he said.
China has made several regulatory changes to increase oversight of digital assets. Recent measures include requiring banks to monitor and report risky crypto activities such as cross-border gambling and underground transactions. Despite these regulations, China supports the development of stablecoins in jurisdictions like Hong Kong, which it treats as a controlled pilot area.
Several projects have taken shape in Hong Kong, where Standard Chartered and Animoca Brands are creating a Hong Kong dollar stablecoin. JD.com has also registered entities for potential stablecoin launches, while Ant International is applying for stablecoin issuer licenses in both Singapore and Hong Kong.
In July, Chinese blockchain company Conflux announced the release of a new stablecoin backed by the offshore Chinese yuan, intended for use outside mainland China. AnchorX also received approval for its yuan-pegged stablecoin, AxCNH, in Kazakhstan. These stablecoins are aimed at offshore usage, including for countries involved in the Belt and Road Initiative, which focuses on building trade links between Asia, Africa, and Europe.
While China maintains tough restrictions on digital currencies domestically, it appears to be promoting its digital assets strategy internationally, especially through partnerships and developments outside the mainland.
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