China is intensifying discussions about the influence of stablecoins like USDT and USDC on its financial system, highlighting the country's strategic approach to reducing dollar dominance.
China Targets USDT and USDC in Policy Talks
The Chinese government has expressed concern over the growing influence of US stablecoins. USDT and USDC were mentioned in policy discussions as examples threatening China’s monetary authority. Academic advisors, including Deng Jun and Zhang Shuyu, play a significant role in shaping these policies.
Global Stablecoin Expansion Threatens Sovereignty
The global expansion of US stablecoins is viewed as a potential threat to local currency sovereignty. The Chinese government is responding by promoting domestic digital currency solutions to maintain financial control. As Deng Jun stated, 'Stablecoins like USDT and USDC are a digital dollar shadow system. Their global expansion enhances dollar liquidity and influence. If left unchecked, it could erode China’s financial autonomy and deepen worldwide reliance on the dollar.'
China's History of Stablecoin Regulation
Past stablecoin bans have occurred within China’s crypto governance. Despite these bans, cryptocurrencies like Bitcoin continue to thrive, reflecting ongoing market adaptability. Experts suggest that this scenario could foster an environment ripe for financial innovation as countries like China explore alternatives.
China continues to actively discuss issues related to American stablecoins and is considering more stringent regulations in this area, which may impact the global financial landscape.
