Chinese regulator calls for close monitoring of stablecoins in cross-border payments
The People's Bank of China (PBOC) is once again emphasizing the growing role of stablecoins in the global financial architecture. Wang Xin, head of the regulator's research bureau, stressed the need for a close analysis of the impact of these digital assets on the international monetary system, particularly in the context of cross-border payments, during his speech at the Shanghai Financial Forum.
Wang Xin noted that the current international payment infrastructure requires modernization. In his view, it should become safer, more neutral, and more efficient. A key factor here is improving the interaction between central bank settlement systems and retail payment networks. He called for a "cautious and sustainable" exploration of the potential of new payment instruments, while simultaneously improving the regulatory framework and strengthening international coordination.
Key thesis: "It is necessary to closely monitor whether stablecoins will begin to play a more significant role in cross-border payments, as well as to study the application of CBDCs beyond national markets," stated the PBOC representative.
Payment Infrastructure as the Foundation of Global Trade
Wang Xin's speech was part of a plenary session dedicated to reforming global financial governance. He emphasized that effective cross-border financing directly depends on the availability of a diverse and reliable payment infrastructure. It should serve as a pillar for global trade, investment, and economic growth. However, according to him, the existing system faces growing uncertainty and risks becoming a tool of political or economic pressure.
In this context, the PBOC proposes to reconsider the approach to stablecoins, which could become an alternative or complement to traditional channels. Simultaneously, the regulator is actively promoting the use of the digital yuan (e-CNY) as its own instrument for international settlements.
China's Policy: From Prohibition to Controlled Internationalization
Against the backdrop of strict restrictions on cryptocurrency operations imposed back in 2021 (including a ban on mining and bank participation in Bitcoin transactions), China is betting on state-issued digital currencies. It recently became known that 26 financial organizations in Shanghai signed agreements for direct participation in the International Center for Digital Yuan Operations. This will allow them to connect to the Cross-border e-CNY Transfer Services platform for round-the-clock settlements with foreign central banks.
Additionally, the PBOC announced new measures to develop the offshore yuan. Six major state-owned banks, including Bank of China, have received the right to conduct offshore yuan operations in the Shanghai Free Trade Zone. The creation of the FIMA RMB Repo instrument, which allows foreign central banks to obtain liquidity backed by Chinese bonds, is a direct step towards reducing dependence on the US dollar.
My expert analysis: The PBOC's statements are not just rhetoric, but a clear signal to the market. China, having formally banned cryptocurrencies, is in fact studying stablecoin technology to strengthen the yuan's position. Permission to issue yuan-denominated stablecoins, which was reportedly considered as early as 2025, could be the next logical step. This would allow China to create its own, controlled alternative to the dollar in the digital economy, bypassing traditional financial channels.