Quick Breakdown
- •Beijing has halted all private stablecoin projects in China, reversing the recent momentum from initiatives by Ant Group and JD.com, which were based in Hong Kong.
- •The message is clear: China wants to protect its monetary sovereignty and push the state-backed digital yuan (e-CNY) as the only legitimate digital currency.
- •Regulators warn that private stablecoins pose risks to financial stability, cross-border control, and anti-money-laundering enforcement.
- •China’s decision could slow fintech innovation, driving experimentation and investment to more open markets.
From Fintech Pioneer to Policy Pullback
Over the past decade, Chinese tech giants have redefined how people interact with money: mobile payments have replaced cash, digital wallets have become everyday essentials, and “super apps” have turned phones into banks, stores, and even investment hubs.
Naturally, the rise of blockchain technology followed, propelling the country into the global spotlight. However, when the focus shifted toward China’s stablecoin development, enthusiasm quickly met resistance.
In May 2025, Hong Kong introduced a progressive licensing framework for fiat-backed stablecoins, inviting global digital-asset players to participate. Tech leaders like Ant Group and JD.com moved quickly, seeking approval under this new system. For a brief moment, it looked like China’s stablecoin projects could finally bridge state oversight and market innovation.
Then, by October 2025, Beijing intervened. The People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) ordered the suspension of all private stablecoin initiatives, effectively drawing a line in the sand. The rationale was familiar—protecting monetary sovereignty, mitigating systemic risk, and maintaining stability in a rapidly evolving financial world.
The Dilemma of Control and Creativity
China embraced digital finance early, but on its own terms. Alipay and WeChat Pay made phones the default wallet for daily life and regulators largely let that happen as long as it improved payments, tax visibility, and consumer convenience. Risks began to pile up, and the state, wanting guardrails, stepped in. The pause of Ant Group’s IPO in 2020 and tighter rules on fintech lending showed where the lines were.
On blockchain, the message was simple: “use the tech, not crypto.” Beijing encouraged enterprise and government use cases: supply-chain tracking, trade finance, and notarization pilots. The Blockchain-based Service Network (BSN) gave companies a state-sanctioned way to build on permissioned chains without touching public tokens—providing businesses with useful infrastructure while keeping activity within the confines of the policy fence.
Where Stablecoins Became a Harder Problem
Privately issued stablecoins raised a different question: who controls money? If a company can issue a token pegged to the dollar or the yuan and people use it at scale, the issuer starts to share monetary power with the central bank. Which was why China banned ICOs in 2017, further restricted trading and other exchange activities in 2021 and kept formal onshore stablecoin issuance off the table. Beyond the speculative nature of crypto, there were concerns about capital controls, consumer protection, and systemic risk if a private coin grew too large.
At the same time, the state built its own answer: the digital yuan (e-CNY). Pilots in cities like Shenzhen and Suzhou put e-CNY into everyday life—lottery “red packets,” transit fares, and online shopping through partners like JD.com and Meituan. Banks integrated e-CNY wallets into their apps. The message to the industry was clear: Innovation is welcome when it strengthens monetary control and auditability. It is not welcome when it creates a parallel currency issued by a private firm.
Here’s How Things Look Currently on the Ground
- •Everyday payments: Alipay and WeChat Pay still dominate, with tighter supervision and bank-like rules on how funds are handled.
- •Enterprise blockchain: BSN and other permissioned systems support logistics, invoices, and compliance use cases without public crypto.
- •Stablecoin limits: Offshore coins like USDT circulate informally among traders, but onshore issuance and mainstream exchange access are restricted.
- •CBDC in practice: e-CNY pilots show programmable payments working within China’s data and compliance frameworks.
If you are still trying to understand China’s “stablecoin stance,” just remember the guiding logic. The state wants the benefits of fast, programmable money and will back any that preserves monetary sovereignty and visibility. It will discourage or ban private coins that could displace the central bank’s role, weaken capital controls, or introduce hard-to-supervise risks. The result is a two-track system: rapid adoption of digital payments and state-led CBDC experiments, alongside strict limits on privately issued stablecoins.
Why Beijing Prioritizes Monetary Power Over Decentralization
For Beijing, China’s stablecoin regulation isn’t merely about technology; it’s about control and credibility. Officials have repeatedly warned that privately issued stablecoins could undermine financial stability by enabling unregulated cross-border flows and creating parallel financial channels that fall outside state oversight.
At the 2025 Financial Street Annual Meeting, PBoC Governor Pan Gongsheng underscored these concerns, echoing sentiments shared at IMF and World Bank gatherings. He cautioned that many stablecoins fail to meet anti-money laundering and customer verification standards, leaving loopholes for illicit transactions, terrorist financing, and market manipulation.
This stance clarifies why China’s stablecoin efforts are tightly restricted: Beijing views the digital yuan (e-CNY) as China’s only legal digital currency—one designed to strike a balance between technological innovation and state control. The digital yuan allows the state to maintain oversight while extending monetary influence globally.
Competing Blueprints: Private Stablecoins vs. State-Controlled e-CNY
The Innovation Pushback: A Risk of Losing Ground
China’s fintech edge has always been its speed—the ability to test, adapt, and scale at record pace. But that very dynamism now faces its toughest test yet. By halting China’s stablecoin development, Beijing may be safeguarding short-term stability at the expense of long-term innovation.
Hong Kong’s stablecoin framework had the potential to serve as a bridge—linking the renminbi’s growing digital ecosystem with global finance. Instead, Beijing’s abrupt reversal has created uncertainty, signalling that even regulated innovation can be paused overnight.
When regulation becomes too rigid, creativity tends to migrate. Other regions are already capitalizing on this opening, welcoming private-led digital currency experiments. If China remains overly cautious, it risks watching its fintech leadership slowly erode as innovation finds friendlier shores.
The Way Forward: Collaboration, Not Confrontation
Ultimately, the answer to the China stablecoin dilemma may lie in collaboration rather than confrontation. A middle path, where the state sets the guardrails and private firms innovate within them, could preserve both control and creativity.
For regulators, the task ahead is to design frameworks that protect financial integrity without suffocating experimentation. For innovators, aligning with state priorities—monetary sovereignty, secure digital payments, and tokenized real-world assets—could unlock new growth opportunities.
Will state and market ever move in perfect harmony? Maybe not. But China’s experience shows that coexistence is possible—if both sides are willing to adapt. The stablecoin reversal isn’t the end of innovation in China; it’s a reminder that innovation in the country’s financial ecosystem must evolve within the state’s rhythm.
As China recalibrates, one question remains: what comes next for China’s stablecoin ambitions, and what lessons will the rest of the world draw from its cautious dance between power and progress?