China “slams the brakes” on stablecoins as Hong Kong and the West accelerate

Bloomberg reports that Chinese financial officials have recently requested securities firms and research organizations to stop publishing documents and cancel seminars related to stablecoins. The directive was issued from late July to early August, aimed at cooling speculation and preventing the risk of being exploited for illegal fundraising. #china

Stablecoins – typically pegged to the USD and backed by cash or treasury bonds – are booming in cross-border payments. However, Beijing warns that this type of asset carries risks, especially as many citizens do not have a clear understanding of crypto. Recently, several fraud cases related to #stablecoin have been recorded in Beijing, Suzhou, and Zhejiang.

Despite China's ban on most crypto activities, OTC trading remains strong, with the volume in the first 9 months of 2024 estimated at 75 billion USD (Chainalysis).

In contrast, #HongKong in May 2025 passed a legal framework for stablecoins to attract businesses, while also implementing various policies to encourage crypto, such as tax reductions, exchange licensing, and proposals to include Bitcoin in national reserves.

The international community is also supporting stablecoins: the European Union adopted the MiCa framework last year, and last month President Trump signed the GENIUS Act, the first federal legislation in the U.S. dedicated to stablecoins.