In major shift, Shanghai regulator mulls policy responses to stablecoins and cryptocurrencies

ArsenDigital Marketing2025-07-119212

By Summer Zhen

HONG KONG (Reuters) -A Shanghai regulator said it held a meeting this week for local government officials to consider strategic responses to stablecoins and digital currencies - a marked shift in tone for China where crypto trading is banned.

The Thursday meeting was organised by the Shanghai State-owned Assets Supervision and Administration Commission and follows calls by experts and major companies in China to develop a yuan-pegged stablecoin.

We need to have "greater sensitivity to emerging technologies and enhanced research into digital currencies," He Qing, the regulator's director told the meeting according to a post on the body's official WeChat account.

Photos of the meeting showed some 60-70 attendees.

Shanghai is China's main international financial hub and often leads pilot programmes for regulatory change.

Stablecoins - which are typically pegged to a fiat currency and offer faster and cheaper transactions - have gained much momentum worldwide. In the U.S., where the legal framework is more developed, more and more companies such as Amazon and Walmart are looking at launching stablecoins.

In China, e-commerce firm JD.com and fintech giant Ant Group are urging the central bank to authorise yuan-based stablecoins to counter the growing sway of U.S. dollar-linked cryptocurrencies, sources have said.

The companies plan to apply for stablecoin licences in Hong Kong, where stablecoin legislation is scheduled to take effect on August 1.

A policy expert from Guotai Haitong Securities spoke at the Shanghai meeting about the history, types and characteristics of cryptocurrencies and stablecoins, and analysed global regulatory frameworks and strategic approaches, the regulator's post said.

The expert explained the opportunities and challenges facing stablecoins and offered policy suggestions for digital currency development, the post added.

In addition to stablecoins, other digital currencies have also been gaining in popularity, with bitcoin climbing to an all-time high near $112,000 this week.

Any change in China may not come easily. The central bank's governor Pan Gongsheng said last month that the boom in digital currencies and stablecoins poses huge challenges to financial regulation.

Mainland China banned cryptocurrency trading and mining in 2021 due to concerns about the stability of the financial system.

(Reporting by Summer Zhen; Editing by Edwina Gibbs)

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Daegan

Improving financial stability and fostering a regulated ecosystem remains key for Shanghai's regulator as they mull over policy responses to stablecoins; balancing innovation with caution."

2025-07-11 20:34:19 reply
Mason

The Shanghai regulator's consideration of policy responses to stablecoins and cryptocurrencies in a major shift indicates the nation’locations increasing sophistication on regulating digital assets, potentially setting an important precedent for other jurisdictions dealing with similar challenges.

2025-07-11 20:34:34 reply

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