Shanghai Regulator Explores Stablecoin Policy in Notable Shift for China
A Shanghai regulatory body announced it held a meeting this week with local officials to explore strategic policy responses to stablecoins and digital currencies—a notable change in stance for China, where cryptocurrency trading remains banned.
The Thursday session was organized by the Shanghai State-owned Assets Supervision and Administration Commission and comes amid growing domestic calls to develop a yuan-backed stablecoin. Leading Chinese companies and industry experts have recently urged the country to strengthen its position in the digital asset space.
“We must increase our awareness of emerging technologies and deepen research into digital currencies,” said Director He Qing at the meeting, according to a post on the commission’s official WeChat account.
Photos from the event showed roughly 60 to 70 participants in attendance.
As China’s primary financial hub, Shanghai often serves as a testing ground for new regulatory initiatives and reforms.
Stablecoins—digital tokens typically pegged to fiat currencies and known for enabling quicker, lower-cost transactions—have gained momentum globally. In countries like the U.S., where the regulatory landscape is more established, corporations including Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) are reportedly exploring their own stablecoin initiatives.
In China, companies such as JD.com and Ant Group have reportedly been lobbying the central bank to support yuan-denominated stablecoins, partly to counter the growing dominance of U.S. dollar-linked digital assets. These firms are also expected to apply for stablecoin licenses in Hong Kong, where new legislation is set to go into effect on August 1.
A policy analyst from Guotai Haitong Securities spoke at the Shanghai meeting, offering an overview of the evolution, types, and regulatory treatment of cryptocurrencies and stablecoins around the world. The expert also outlined potential opportunities and risks, providing policy recommendations for the future of digital currency development in China.
Beyond stablecoins, other cryptocurrencies have continued to gain traction, with Bitcoin recently hitting a new record high near $112,000.
However, any significant regulatory change on the mainland may face resistance. Last month, People’s Bank of China Governor Pan Gongsheng warned that the rapid growth of digital currencies and stablecoins poses serious challenges for financial oversight.
China banned cryptocurrency trading and mining in 2021, citing threats to financial stability.
