Chinese authorities begin discussions on stablecoin response..."Research must be strengthened"

Chinese authorities have begun discussing strategic response measures for stablecoins and digital currencies.

According to Reuters on the 10th (local time), the Shanghai State-owned Assets Supervision and Administration Commission (Shanghai SASAC) held a meeting on digital currency response strategies with more than 60 local government officials. At the meeting, Chairman He Qing stated, "We need to increase sensitivity to new technologies and strengthen research on digital currency."

This meeting was held at a time when major private companies and experts in China have been emphasizing the need for yuan-based stablecoins. The fact that an official body held a public meeting on stablecoins, despite the prohibition of virtual asset (cryptocurrency) trading in China, is seen as a signal of a possible regulatory shift.

Chinese companies such as JD.com and Ant Group are reportedly preparing to obtain licenses to issue yuan-pegged stablecoins in Hong Kong. Hong Kong is set to implement laws related to stablecoins in earnest from August 1.

However, regulatory easing on the mainland is expected to take more time. Pan Gongsheng, Governor of the People’s Bank of China (PBOC), maintained a cautious stance last month, saying, "The proliferation of digital assets, including stablecoins, poses a major challenge to financial regulation." In 2021, the government of China completely banned virtual asset trading and mining, citing financial market stability issues.