Former governor of the People's Bank of China, Zhou Xiaochuan, voiced strong concerns regarding the growing support for stablecoins in the country.
Warning About Stablecoins
In mid-July, during a closed-door session, Zhou Xiaochuan stated that stablecoins do not provide sufficient benefits relative to their risks to China's financial system. He emphasized that these tokens could undermine existing efficiency and control.
Risks of Speculation and Instability
Zhou also expressed concerns that stablecoins could become speculative instruments, heightening risks of fraud and market manipulation. He noted, "We must be vigilant about the risk of stablecoins being excessively used for speculative asset trading."
Regulatory Measures in China
Chinese regulators have historically viewed digital tokens as potential threats to financial order. This month, authorities urged local brokers to cease publishing research or hosting seminars related to stablecoins due to concerns over fraud and undermining central bank control.
Zhou Xiaochuan's remarks underscore China's cautious approach to stablecoins in the context of ensuring financial stability and control.
