The central bank has made its first major statement on stablecoins; where will the market go?

Author: Cai Pengcheng

Source: TMTPost

On November 29, the People's Bank of China officially published an article titled "Meeting Held on Coordination Mechanism for Combating Virtual Currency Trading and Speculation," which provided the latest discussion on virtual currencies and stablecoins.

The article provides a new assessment of stablecoins: "Stablecoins are a form of virtual currency that currently cannot effectively meet requirements for customer identification and anti-money laundering, and there is a risk that they may be used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers."

A well-known Web 3 lawyer told Barron's China, "Stablecoins are a form of virtual currency. This is the first time that the authorities have explicitly defined stablecoins in an official document and directly included them in the regulatory framework of 'illegal financial activities involving virtual currencies.' This essentially negates all discussions about stablecoins in mainland China."

He added that the statement would not directly affect the Hong Kong stablecoin market, but it would have an indirect impact, as mainland institutions would be more cautious and discreet in entering the Hong Kong stablecoin market.

The full text is as follows:

As mentioned in the article above, fundraising scams using the guise of stablecoins have been rampant this year. Financial regulatory agencies in Shenzhen, Beijing, Suzhou, Zhejiang, and other places have issued a series of risk warnings, urging vigilance against illegal financial activities using emerging concepts such as "stablecoins" as a gimmick. Companies such as Ant Group and JD.com have also publicly refuted allegations of stablecoin fraud involving their companies.

In recent months, there has been a lot of discussion and activity surrounding stablecoins. The following is a partial summary:

In June of this year, several internet giants and listed companies announced they would apply for stablecoin licenses in Hong Kong. On June 18th, Pan Gongsheng, Governor of the People's Bank of China, delivered a keynote speech at the 2025 Lujiazui Forum, in which he addressed stablecoins as follows:

On July 10, the Party Committee of the Shanghai State-owned Assets Supervision and Administration Commission held a central group study session to focus on the development trends and coping strategies of cryptocurrencies and stablecoins. That same month, financial regulatory agencies in multiple regions issued a series of risk warnings regarding stablecoins.

On August 1, Hong Kong's Stablecoin Ordinance officially came into effect, providing a clear regulatory framework and licensing pathway for stablecoin issuers. That same month, foreign media, citing sources, reported that China was considering allowing the use of renminbi-backed stablecoins for the first time, aiming to promote the wider global use of the renminbi.

On October 27, Pan Gongsheng stated at the 2025 Financial Street Forum Annual Meeting that international financial organizations and central banks, among other financial regulatory bodies, generally hold a cautious attitude towards the development of stablecoins. Pan Gongsheng mentioned that at the annual meetings of the International Monetary Fund (IMF) and the World Bank, stablecoins and their potential financial risks were among the most discussed topics by finance ministers and central bank governors from various countries. The prevailing view was that, as a financial activity, stablecoins currently cannot effectively meet basic requirements such as customer identification and anti-money laundering, amplifying loopholes in global financial regulation, such as money laundering, illegal cross-border fund transfers, and terrorist financing. The market is rife with speculation, increasing the vulnerability of the global financial system and impacting the monetary sovereignty of some less developed economies.

From a global perspective, on November 7th, the Japanese government announced its support for a stablecoin project jointly launched by Japan's three major banks. Japanese startup JPYC launched the world's first yen-backed stablecoin, priced at a fixed 1 JPYC to 1 yen, backed by yen deposits and Japanese government bonds. Previously, in September, nine European banks (including ING, KBC, and Danske Bank) formed a euro-pegged stablecoin consortium, planning to issue a regulated euro-linked stablecoin for cross-border payments. In July, Trump swiftly signed the Genius Bill, establishing a regulatory framework for stablecoins.