according to the materials from the site - CryptoFrontNews
China may be reconsidering its hardline stance on cryptocurrencies after discussions about new policies began in Shanghai. According to Reuters, the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) recently held a rare meeting focused on stablecoins and digital currencies.
This decision was made after the government faced increasing pressure from IT company executives and political analysts who demanded the introduction of a stablecoin backed by the yuan. The discussions indicate a noticeable change in tone, despite China's strict ban on cryptocurrency trading. Notably, the Central Bank hinted at new opportunities, acknowledging the potential of stablecoins to transform international payments.
Furthermore, He Qing, the director of SASAC, emphasized the need to accelerate research and closely monitor new technologies such as stablecoins. This came after China expressed concern about the use of dollar-backed stablecoins, such as USDC, by the United States to enhance its financial power.
In response, calls for the creation of a stablecoin pegged to the offshore yuan have intensified. Moreover, the head of the People's Bank of China, Pan Gongsheng, recently stated that stablecoins could transform cross-border payments.
Hong Kong as China's 'sandbox' for stablecoins
However, capital controls in mainland China make direct integration of cryptocurrencies difficult. In this regard, experts suggest testing yuan-backed stablecoins in Hong Kong. According to People's Bank of China advisor Huang Yiping, the offshore yuan market in Hong Kong makes it a practical starting ground.
If successful, the region could pave the way for broader adoption of cryptocurrencies without exposing the Chinese population to the direct impacts of volatile assets. Additionally, state media have urged regulators to act promptly, emphasizing that the development of stablecoins should begin 'sooner rather than later.'
Despite this potential, bans on cryptocurrencies in mainland China remain in effect. The crackdown implemented in September 2021 in China continues to be enforced. Nevertheless, current events suggest that authorities may soften their stance in certain controlled regions.
Bitcoin accumulation and the fallout from the FTX collapse fuel speculation
Moreover, speculation regarding China's secret accumulation of bitcoins has intensified. Several reports claim that the country could be the second-largest holder of BTC after the U.S. However, the government has not confirmed the existence of bitcoins and has not published a strategy for their sale.
Meanwhile, the bankruptcy case of FTX is causing disputes: Chinese creditors are opposing the freezing of payments. They argue that, despite the trading ban, ownership of cryptocurrency remains legal.
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