The PBoC calls for global monitoring of stablecoins: a threat or a new stage in the evolution of payments?
The People's Bank of China (PBOC) is once again drawing the global financial community's attention to the rapidly growing role of stablecoins. Wang Xin, head of the regulator's research bureau, speaking at the annual financial forum in Shanghai, emphasized the need for close monitoring of how these digital assets impact the international monetary system and cross-border payments.
In his speech at a plenary session dedicated to reforming global financial governance, Wang Xin noted that the current payment infrastructure is facing growing uncertainty and, in his words, risks becoming a tool of political and economic pressure. He sees a way out of this situation in creating a more secure, neutral, and efficient system where central bank settlement systems (CBDCs) and retail payment networks closely interact. It is in this context that the regulator calls for "cautiously and sustainably" exploring the potential of stablecoins, neither denying their possible impact nor rushing to conclusions.
Stablecoins vs. CBDCs: The Battle for Cross-Border Settlements
The PBOC's key message is the need to determine whether stablecoins will begin to play a more significant role in international settlements. Concurrently, China is actively promoting its own digital currency—the digital yuan (e-CNY). Wang Xin directly called for studying the application of CBDCs beyond national markets, clearly indicating Beijing's strategic course towards internationalizing the yuan through digital technologies. Against the backdrop of strict restrictions on cryptocurrencies imposed back in 2021, the development of payment innovations in China is proceeding exclusively through state-regulated channels.
Infrastructure Leap: e-CNY and Offshore Yuan
The PBOC's practical steps confirm the seriousness of its intentions. On June 16, the International Digital Yuan Operations Center signed direct participation agreements with 26 financial institutions in Shanghai. This provides access to an integrated platform for round-the-clock cross-border settlements called Cross-border e-CNY Transfer Services. Moreover, six of the largest state-owned banks have been authorized to conduct offshore yuan transactions in the Shanghai Free Trade Zone. In addition, the PBOC has created the FIMA RMB Repo instrument, allowing foreign central banks to obtain yuan liquidity backed by Chinese bonds.
These measures are part of a systemic strategy to reduce dependence on the dollar system. Given that, according to sources, as early as August 2025, the Chinese government considered the possibility of allowing the creation of yuan-backed stablecoins, the current PBOC stance appears to be a calculated maneuver: not to ban, but to control and, ultimately, lead the process.
My analysis: The PBOC's statement is not just a warning but a clear signal to the market. China, as the world's largest economy, cannot ignore stablecoins, but it will not allow them to develop outside state control. We are witnessing a transition from a total ban to a tactic of "managed coexistence," where CBDCs and private stablecoins will compete and complement each other, but under strict oversight. For investors, this means that the next phase of stablecoin growth will be closely tied to the policies of sovereign states, not just market forces.