Former Chinese central bank governor Zhou Xiaochuan has urged a more measured tone amid a global surge of interest in stablecoins, calling for a “multidimensional assessment” of their genuine utility and the systemic risks they may pose.
The United States and Hong Kong are rolling out regulatory frameworks for the asset, and speculation has been growing about the likelihood of Beijing following suit by introducing yuan-backed stablecoins in a bid to further internationalise its currency.
“We need to be vigilant against the risk of stablecoins being excessively used for asset speculation, as misdirection could trigger fraud and instability in the financial system,” Zhou said at a closed-door China Finance 40 Forum (CF40) seminar last month, according to an article published on Wednesday by the think tank, whose membership includes senior Chinese regulatory officials and financial experts.
He warned that some industry players could leverage the hype around stablecoins to boost their valuations, focusing on cashing out rather than the profitability or sustainability of the stablecoin business, which would be “detrimental to the healthy development of the financial system” and could lead to the accumulation of “systemic risks”.
The article, which compiled Zhou’s comments at the seminar, said that some current discussions on stablecoins were based on a single perspective, and there needed to be a “multidimensional, multi-perspective assessment” instead.
Stablecoins, digital currencies pegged to fiat currencies or reserve assets such as gold, have become a hot topic in global economic debate. They aim to combine the efficiency of digital assets with the reliability of traditional money and are part of the broader trend of tokenisation in the financial sector.
