China Orders Stablecoin Promotion Block – What’s Happening?

China clamps down on stablecoins amid financial risk concerns

Chinese financial authorities have asked securities firms and research institutes to stop promoting stablecoins or holding related seminars, to prevent fraud risks.

According to Bloomberg, several large organizations have been ordered to cancel events and stop issuing reports since late July.

Although China still completely bans cryptocurrency trading , the OTC market remains vibrant, with an estimated volume of $75 billion in the first 9 months of 2024 alone .

Many localities such as Beijing, Suzhou, and Zhejiang have also warned about illegal capital mobilization activities through stablecoins.

China cautious, Hong Kong open
The move comes amid speculation that Beijing is easing its stance on digital assets, especially as Hong Kong implemented a stablecoin licensing law that granted operating rights to 11 exchanges and 44 digital asset companies, including state-backed Chinese firms.

However, experts say the mainland government still "does not want to create a crowd effect on an asset class without fully understanding the risks . "

Meanwhile, stablecoins are increasingly used for fast and cheap cross-border payments, with their global size forecast to reach $3.7 trillion by 2030 .

Global trend of tightening laws
Globally, stablecoin regulation is accelerating. On July 18, President Donald Trump signed the first federal stablecoin bill in the United States, calling it a “ giant step ” to strengthen the country’s financial and digital currency technology position.

Major corporations such as Western Union and Ripple also expressed their expectation that stablecoins will explode from $250 billion to $2 trillion in the near future, thanks to their ability to improve international money transfers, support volatile currency markets, and optimize transaction costs.