China’s central bank is closely monitoring stablecoins in cross-border payments

The People’s Bank of China said stablecoins could play a larger role in cross-border payments and called for closer monitoring of their impact on the international monetary system and global payment networks.

Summary

• China’s central bank said stablecoins could take on a larger role in cross border payments and called for closer monitoring of their impact.
• Officials urged stronger international regulatory coordination as stablecoins and central bank digital currencies gain attention in global payments.
• The comments come months after Beijing expanded its crypto restrictions to cover RMB linked stablecoins and tokenized real world assets.

According to remarks delivered by Wang Xin, director-general of the Research Bureau of the People’s Bank of China, at the Lujiazui Forum on June 17, policymakers are paying close attention to how stablecoins could affect the international monetary system and cross-border payment networks.

Addressing a session on global financial governance reform and cooperation, the central bank official said sustainable development depends on large volumes of cross-border investment and financing activity, which in turn requires efficient and diversified payment infrastructure. He added that growing uncertainty in the international payment system, including the risk of payment channels being used as geopolitical tools, could affect normal cross-border transactions.

Against that backdrop, the official said central bank payment systems and retail payment networks should strengthen connectivity while policymakers carefully explore new payment technologies. Stablecoins, he noted, may play a more prominent role in international payments in the future, making regulatory coordination and international cooperation increasingly important.

“We also need to pay attention to some new aspects,” Wang said, referring to stablecoins and central bank digital currencies.

He said the role of stablecoins in cross-border payments, as well as future regulatory and international coordination arrangements, deserves continued attention. He added that the cross-border use of central bank digital currencies is another area that warrants close observation and policy cooperation.

Stablecoins remain under scrutiny in China

The comments come several months after the People’s Bank of China, the China Securities Regulatory Commission, and other agencies issued a regulatory notice that widened the country’s cryptocurrency restrictions to cover RMB-pegged stablecoins and tokenized real-world assets.

Under the February framework, no entity or individual may issue a renminbi-linked stablecoin outside mainland China without approval from relevant authorities. Regulators said stablecoins connected to sovereign currencies could influence monetary sovereignty because of their role in circulation and payments.

Authorities also prohibited unauthorized tokenization activities involving real-world assets and maintained existing restrictions on cryptocurrency trading and mining. The notice warned that providing intermediary or technical services for certain tokenization activities could be treated as unlawful financial operations under Chinese law.

While mainland authorities have tightened oversight of stablecoins, Hong Kong has continued developing a licensing regime for issuers. Earlier this year, the Hong Kong Monetary Authority said it was reviewing dozens of applications under the territory’s Stablecoins Ordinance, which requires licenses for issuers operating in Hong Kong or issuing stablecoins linked to the Hong Kong dollar.

Back at the forum, Wang said international financial institutions and multilateral development banks should strengthen their financial capacity and improve governance structures to support developing economies. He also called for faster quota reforms and more effective operating processes, arguing that international institutions should play a larger role in providing funding and capacity-building support for sustainable development projects.