Shanghai officials are showing a growing interest in stablecoins despite China’s longstanding ban on cryptocurrencies, signaling a potential policy shift in the country’s approach to digital assets.
The Shanghai State-owned Assets Supervision and Administration Commission (SASAC) recently convened to discuss strategic responses to stablecoins and digital currencies, highlighting a more open stance toward emerging fintech innovations.
In major shift, Shanghai regulator mulls policy responses to stablecoins and cryptocurrencies https://t.co/fptYWXCkD2 https://t.co/fptYWXCkD2
— Reuters (@Reuters) July 11, 2025
Following the meeting, SASAC director He Qing emphasized the need for “greater sensitivity to emerging technologies and enhanced research into digital currencies,” reflecting an official recognition of stablecoins’ rising global adoption and their potential impact on China’s financial ecosystem.
This development aligns with broader discussions within China’s central bank, the People’s Bank of China (PBOC), which has been closely monitoring the global stablecoin landscape. PBOC Governor Pan Gongsheng acknowledged the transformative potential of stablecoins in global payment systems and highlighted the urgency for regulatory frameworks to support yuan-backed stablecoins.
State media have also weighed in, with Securities Times urging Beijing to accelerate the development of stablecoins “sooner rather than later.” PBOC adviser Huang Yiping suggested Hong Kong could serve as a testing ground for yuan-pegged stablecoins due to its offshore renminbi market, noting that mainland China’s strict capital controls limit such experimentation domestically.
Despite China’s strict cryptocurrency bans since 2017—including prohibitions on exchanges and initial coin offerings—the government continues to explore blockchain technology and digital currency innovation. The PBOC has been developing blockchain trading platforms and pilot zones in regions such as Shenzhen, Guangdong, and Hainan, indicating a nuanced approach that separates blockchain adoption from cryptocurrency trading.
Experts and major companies in China are calling for the country to develop its own stablecoin to maintain financial sovereignty and counterbalance the dominance of US dollar-backed stablecoins like Circle’s USDC. This reflects a strategic effort to harness the benefits of digital currencies while maintaining regulatory control.
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