Authorities Urge Stablecoin Brokers and Think Tanks to Halt Endorsements
Chinese regulators have reportedly instructed local brokerages and research institutions to stop publishing studies and hosting events that promote stablecoins. According to Bloomberg News, the move is part of a broader effort to contain risks linked to the asset class and prevent potential financial instability. The guidance, issued in late July and early August, urged firms to cancel planned seminars and stop distributing research materials on stablecoin. Sources familiar with the matter told Bloomberg that the aim is to curb the rising influence of these digital assets.
Concerns Over Fraud and Financial Misuse
Authorities are increasingly worried that stablecoins could be misused for fraudulent activities within mainland China. These concerns have intensified despite stablecoins being designed to maintain a fixed value, often pegged to traditional currencies like the US dollar.
Stablecoins are popular among cryptocurrency traders for moving funds between tokens. However, their growing use has triggered caution among regulators, especially in markets where crypto trading remains restricted.
Crypto Ban Still in Effect on the Mainland
China has maintained a ban on cryptocurrency activities since 2021. While this ban continues on the mainland, neighbouring Hong Kong has taken a different approach. Earlier this year, Hong Kong passed a bill to regulate stablecoins as part of its strategy to become a global hub for digital assets.
The China Securities Regulatory Commission and the People’s Bank of China have not responded to Reuters’ requests for comment. The Bloomberg report could not be independently verified at the time.
with inputs from Reuters