The People's Bank of China demands strengthened oversight of stablecoins in international settlements.
The People's Bank of China (PBOC) has officially called for closer monitoring of the impact of stablecoins on the global monetary system and cross-border payments. This statement was made by Wang Xin, head of the regulator's research bureau, who emphasized the need to make the international payment infrastructure safer, more neutral, and more efficient.
The New Role of Stablecoins in the Global Economy
According to the PBOC representative, the current payment system is facing growing uncertainty and risks becoming a tool of political pressure. In this context, China's central bank proposes to carefully assess whether stablecoins can occupy a more significant place in cross-border settlements, as well as to explore the potential of using central bank digital currencies (CBDCs) beyond national markets.
Wang Xin's speech was delivered at the plenary session "Reform and Cooperation in Global Financial Governance" during the annual financial forum in Shanghai. He directly linked the development of payment infrastructure to the sustainable growth of international investment and trade. The PBOC insists on the need for "cautious and sustainable" exploration of new instruments, improvement of regulation, and strengthening of interstate coordination.
Strict Policies and the Development of the Digital Yuan
It is worth recalling that mainland China still maintains some of the strictest restrictions on cryptocurrencies: mining has been banned since 2021, and banks and payment systems are prohibited from participating in Bitcoin transactions. Regulators have repeatedly confirmed the illegal status of all cryptocurrency operations, specifically pointing out the risks of stablecoins.
Against this backdrop, the driver of payment innovation in the country is exclusively the digital yuan (e-CNY). On June 16, the International Digital Yuan Operations Center, opened in September 2025, signed direct participation agreements with 26 financial institutions in Shanghai. These participants will gain access to the integrated Cross-border e-CNY Transfer Services platform, which will provide round-the-clock digital payment links with foreign central banks.
Moreover, six major state-owned banks, including Bank of China and China Construction Bank, have already been authorized to conduct offshore yuan transactions in the Shanghai Free Trade Zone. The PBOC has also launched the FIMA RMB Repo instrument, allowing foreign central banks to obtain liquidity in the national currency backed by Chinese bonds. This is part of the strategy to internationalize the yuan and reduce dependence on the dollar system.
My analysis: It is telling that China, having completely banned cryptocurrencies, is now openly discussing stablecoins as a tool for international settlements. This is not a softening of its position, but a pragmatic signal to the market: Beijing recognizes that the technology cannot be ignored, but intends to control it through its own digital yuan infrastructure. If China truly allows yuan-denominated stablecoins, it could fundamentally change the balance of power in global payments.