Chinese authorities have taken steps to limit interest in stablecoins by banning local brokerages and organizations from conducting research and holding seminars on the topic.
Ban on Stablecoin Research
In late July and early August, several leading brokerages and think tanks canceled their events and halted stablecoin research on orders from financial regulators.
Regulator Concerns
Authorities are also concerned that stablecoins could be used as a new tool for fraudulent activities. "Chinese policymakers don't want investors to rush en masse into an asset class they don't have enough information about. They want to avoid a herd mentality when the risks are unknown," said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp.
Crypto Transaction Data in China
Despite China's crypto ban, over-the-counter digital asset transactions reached $75 billion in the first nine months of 2024, according to Chainalysis data. Warnings have been raised in recent months about illicit fundraising activities linked to virtual currencies and stablecoins in regions such as Beijing, Suzhou, and Zhejiang.
China continues its strict policy towards cryptocurrencies, aiming to minimize risks associated with the lack of information about stablecoins and the increased potential for fraud.
