Key Takeaways
- Former PBoC chief Zhou Xiaochuan warns against the rise of stablecoins.
- Zhou argues stablecoins offer no technical or financial advantage over China’s payment rails.
- His remarks contrast with the U.S. and other nations, which are embracing stablecoin adoption.
As global momentum builds around stablecoins—from Washington’s newly minted regulations to Hong Kong’s growing financial experiments—China’s top former central banker is striking a far more skeptical tone.
Zhou Xiaochuan, who served as governor of the People’s Bank of China (PBoC) for more than 15 years, has warned that stablecoins bring greater risks than benefits and should not be embraced as a pillar of the financial system.
Stablecoins Offer Limited Cost Advantages
In remarks delivered at a closed-door meeting, Zhou argued that stablecoins provide no significant technical or cost advantages compared to China’s existing payment infrastructure, which already processes transactions at scale.
He said the enthusiasm sweeping the U.S., Singapore, and Hong Kong is misplaced, cautioning that regulators in those jurisdictions have yet to prove stablecoins can be adequately backed by liquid reserves.
“We must be vigilant about the risk of stablecoins being excessively used for speculative asset trading,” Zhou said, adding that fraud and instability could follow if speculative use continues unchecked.
A Contrast With U.S. Policy
Just days earlier, U.S. Treasury Secretary Scott Bessent called stablecoins “the next big tool” for dollar dominance, underlining Washington’s belief that stablecoins could bolster financial infrastructure and global demand for U.S. debt.
Zhou, however, dismissed such arguments, saying China’s digital payments ecosystem—dominated by platforms like Alipay and WeChat Pay, and reinforced by the ongoing rollout of the digital yuan—is already more efficient than any stablecoin network.
China’s Conservative Stance Persists
China banned cryptocurrencies outright in 2021 and has since positioned the state-backed digital yuan as its preferred model for digital finance.
While Hong Kong has sought to open its doors to crypto businesses and some Chinese firms have reportedly explored stablecoin pilots, Zhou’s warnings underscore Beijing’s reluctance to ease its hardline stance.
For years, the digital yuan has been piloted in cities across China, giving the country one of the most advanced central bank digital currency (CBDC) programs in the world.
That domestic system, Zhou argued, makes stablecoins unnecessary and potentially destabilizing.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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