Despite the ongoing ban on cryptocurrencies in China, signs of a potential policy shift regarding digital assets have emerged. A Shanghai regulator held a rare meeting focused on stablecoins and digital currencies.
Shanghai Meeting
The Thursday meeting gathered 60-70 officials, including policymakers from Guotai Haitong Securities, who presented global developments in stablecoins and provided strategic policy suggestions. This marks a significant tonal shift for a country that outlawed crypto trading and mining back in 2021.
Stablecoins and Control
Despite the discussions around stablecoins, regulator He Qing emphasized the need for "greater sensitivity to emerging technologies and enhanced research into digital currencies." Meanwhile, the Beijing Internet Finance Association issued a warning against stablecoin scams and unlicensed fundraising schemes, accusing bad actors of mimicking Ponzi models.
Course to End Dollar Monopoly
The US dollar continues to dominate the stablecoin market, accounting for over 99% of the total volume. However, some Chinese policymakers are increasingly concerned about ceding control to American dollar-backed tokens. A potential issuance of RMB-backed stablecoins from Hong Kong could be China's strategy to counter the dollar's monopoly.
The landscape surrounding stablecoins and digital currencies in China is evolving, and potential policy changes may positively impact the country's digital economy.