Shanghai Regulator Considers Policy Responses to Stablecoins and Cryptocurrencies in Significant Shift
HONG KONG, July 11, 2025 – In a notable policy development, a regulatory body in Shanghai convened a meeting this week to explore strategic responses to stablecoins and digital currencies, signaling a significant shift in China’s stance toward cryptocurrency-related technologies. This marks a departure from China’s previous stringent ban on cryptocurrency trading imposed in 2021. The meeting, organized by the Shanghai State-owned Assets Supervision and Administration Commission, gathered around 60 to 70 local officials and experts to discuss emerging digital currency trends and regulatory approaches. He Qing, director of the commission, emphasized the need for heightened sensitivity to emerging technologies and called for enhanced research efforts into digital currencies during the session, according to an official post on their WeChat account.
Shanghai, recognized as China’s premier international financial center, often pioneers pilot programs for regulatory innovation. Observers note that China’s robust fintech ecosystem positions the country favorably to influence the future of blockchain-based payment solutions.
Nick Ruck, director at LVRG Research, commented, “Given China’s strong fintech infrastructure, it has the potential to be a key player in shaping blockchain-based payments worldwide.”
Global Momentum in Stablecoins
Stablecoins, digital tokens typically pegged to traditional fiat currencies, have gained considerable traction globally as they offer faster and more cost-effective transaction methods. According to ARK Investment Management, stablecoin transaction volumes reached an estimated $15.6 trillion last year, surpassing payment giant Visa. This trend reflects the rising interest in stablecoins by major corporations and governments alike.
In the United States, companies such as Amazon and Walmart have expressed interest in launching stablecoin initiatives, leveraging a relatively mature regulatory environment to integrate these digital currencies into commerce.
In Asia, South Korea’s new government has pledged to permit won-based stablecoins and to develop necessary infrastructure, though the nation’s central bank advocates for a cautious, gradual approach in adoption.
Calls for Yuan-based Stablecoins in China
Within China, leading firms including e-commerce titan JD.com and fintech heavyweight Ant Group have reportedly urged the People’s Bank of China (PBOC) to authorize yuan-denominated stablecoins. These companies view such developments as a strategic counterbalance to the growing dominance of U.S. dollar-linked cryptocurrencies in the market.
Sources reveal that both JD.com and Ant Group plan to seek stablecoin licenses in Hong Kong, where new legislation for stablecoins is poised to take effect on August 1, 2025. ### Challenges and Policy Considerations
During the Shanghai meeting, a policy expert from Guotai Haitong Securities provided an overview of the evolution, types, and characteristics of cryptocurrencies and stablecoins, while reviewing international regulatory frameworks and offering strategic policy recommendations.
Further, Yang Tao, deputy director of the National Institution for Finance and Development think tank, advocated for the simultaneous issuance of yuan-based stablecoins within the Shanghai Pilot Free Trade Zone and Hong Kong to maximize impact.
Despite these discussions, hurdles remain. China’s capital controls could pose significant barriers to the widespread adoption of stablecoins, market participants suggest. Moreover, Pan Gongsheng, governor of the People’s Bank of China, underscored last month that the rapid expansion of digital currencies and stablecoins presents substantial regulatory challenges.
Mainland China’s ban on cryptocurrency trading and mining, implemented in 2021 over financial stability concerns, still stands, and the future regulatory environment for non-stablecoin cryptocurrencies remains uncertain. Nevertheless, the popularity of digital currencies such as Bitcoin continues to grow globally, with Bitcoin recently reaching a record high above $118,000. ### Looking Ahead
This shift in Shanghai’s approach reflects broader global trends acknowledging the potential of stablecoins and digital currencies as key components of future financial systems. As China weighs possible frameworks for stablecoin issuance, the coming months may see important developments that could reshape the interplay between traditional finance and innovative digital assets within the country and beyond.
Reporting by Summer Zhen in Hong Kong; Editing by Edwina Gibbs
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