China's central bank, the People's Bank of China (PBoC), has issued one of its strongest warnings yet against stablecoins, calling them a threat to global financial stability and vowing to tighten its crackdown on domestic cryptocurrency activities.
Speaking at the 2025 Financial Street Annual Meeting in Beijing, PBoC Governor Pan Gongsheng stated that stablecoins, digital assets pegged to fiat currencies like the U.S. dollar, have created new vulnerabilities in the global financial system and could undermine the monetary sovereignty of smaller economies.
Pan emphasized that stablecoins have amplified weaknesses in the global financial system, citing their role in market speculation and failure to meet key compliance standards such as customer identification and anti-money laundering (AML) requirements. "Stablecoins, as a form of financial activity, still cannot meet the basic requirements of financial supervision," Pan told the conference. "They expose loopholes that can facilitate illegal fund transfers, terrorist financing, and money laundering."
He reaffirmed China's zero-tolerance policy toward private digital currencies, noting that the central bank will continue to work closely with law enforcement to crack down on cryptocurrency operations and speculative activities within mainland China. China has maintained a sweeping ban on crypto trading, mining, and exchange operations since 2017, citing financial risks and consumer protection.
The warning comes amid growing global debate over the rapid expansion of the stablecoin sector. According to data from DefiLlama, the total market capitalization of stablecoins has reached about $308 billion, with Tether (USDT) and USD Coin (USDC) accounting for nearly 87% of the supply. Research from Andreessen Horowitz indicates that these two tokens have processed more than $27 trillion in settlements over the past year, with stablecoin transaction volumes surging to $46 trillion in total value over the past twelve months, roughly comparable to the U.S. Automated Clearing House (ACH) system.
Pan also mentioned that the PBoC would "closely monitor and assess the development of stablecoins in overseas markets," suggesting ongoing wariness of foreign stablecoin growth. Economists in China have voiced concerns that the global rise of U.S. dollar-backed stablecoins could weaken the country's financial autonomy and hinder the internationalization of the yuan. Former Bank of China deputy governor Wang Yongli warned in June that the dominance of USD-pegged stablecoins "poses a strategic challenge" to the renminbi's internationalization.
In contrast to mainland China's strict stance, Hong Kong has introduced a dedicated stablecoin licensing regime, receiving expressions of interest from over 40 companies, including Ant Group, JD.com, Circle, and Standard Chartered. However, Beijing has ordered brokerages and think tanks to halt the promotion of stablecoins, reinforcing its restrictive position. Pan concluded by emphasizing that while blockchain technology holds promise, its application must "operate within strict regulatory boundaries," and virtual assets must not undermine financial stability or monetary sovereignty.
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