Shanghai officials warm to stablecoins despite China crypto ban: Report

Mainland China, one of the most restrictive jurisdictions to cryptocurrencies globally, is reportedly showing signs of a shift in tone toward stablecoins amid new developments in Shanghai.

The Shanghai State-owned Assets Supervision and Administration Commission (SASAC) has held a meeting to discuss strategic responses to stablecoins and digital currencies, Reuters reported on Friday.

Following the Thursday meeting, SASAC director He Qing also called for “greater sensitivity to emerging technologies and enhanced research into digital currencies” in a post on the authority’s official account.

The initiative reportedly came in response to growing calls by experts and major companies in China to develop a potential stablecoin pegged to the Chinese yuan.

China’s central bank weighing in on stablecoins

China’s central bank, the People’s Bank of China (PBOC), has been addressing the issue of rising stablecoin adoption globally, particularly amid the US policy to strengthen the power of the dollar through stablecoins like Circle’s USDC (USDC).

In June, PBOC Governor Pan Gongsheng reportedly acknowledged the transformative potential of emerging technologies like stablecoins in global payment systems, intensifying calls for regulatory approval of yuan-backed stablecoins.

Related: JD.com, Ant Group push yuan stablecoins to challenge US dollar dominance

On June 23, China’s state media, Securities Times, published an article urging Beijing that the development of stablecoins “should be sooner rather than later.”

Subsequently, PBOC adviser Huang Yiping suggested exploring Hong Kong as a testing ground for yuan-backed stablecoins, stressing that mainland China’s tight capital controls make such experimentation unlikely.

“Hong Kong has an offshore market for the renminbi, and if the offshore market develops, it is possible to create a stablecoin pegged to the offshore RMB in Hong Kong in the future,” Huang reportedly said.

This is a developing story, and further information will be added as it becomes available.

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