Central Bank Governor: Stablecoins Have Serious Regulatory Gaps and Reaffirm Strict Control Over Cryptocurrencies

On October 27, at the opening of the "2025 Financial Street Forum," Pan Gongsheng, Governor of the People's Bank of China, reiterated China's tough stance on cryptocurrencies and pointed out that global stablecoin regulation has significant loopholes.

This is also his second warning about cryptocurrency risks within ten days; previously, at the policy debate during the International Monetary Fund/World Bank Annual Meetings in Washington, he expressed similar views to global finance ministers and central bank governors.

Pan Gongsheng highlighted that during their early development, stablecoins have exposed three major risks: first, difficulty in meeting basic regulatory requirements for customer identification and anti-money laundering; second, cross-border flows expand regulatory blind spots in global finance; third, they threaten the monetary sovereignty of vulnerable economies. He emphasized that speculative activities fueled by stablecoins are increasing the fragility of the global financial system.

Regarding domestic regulation, Pan Gongsheng reaffirmed that multiple cryptocurrency control policies issued since 2017 "remain effective." He clearly stated that the People's Bank of China will work with law enforcement agencies to "continue to crack down severely on domestic cryptocurrency operations and speculation," a statement that completely dismisses market speculation about potential policy relaxation.

Notably, this statement comes at a time when discussions about launching a renminbi-pegged stablecoin in Hong Kong are heating up. Although Chinese tech companies have lobbied for approval to issue offshore renminbi stablecoins in Hong Kong, Pan Gongsheng's remarks indicate that any innovation must be promoted through official channels rather than relying on market-driven stablecoin systems.

Industry analysts interpret this as China continuing its "differentiated approach" to cryptocurrency regulation—maintaining a high-pressure stance domestically while closely monitoring offshore stablecoin development.

Meanwhile, as stablecoins increasingly serve as actual settlement tools in Asian trade, Chinese regulators are strengthening oversight of cross-border capital flows and aim to safeguard monetary sovereignty through the official digital renminbi project.

In summary, this ongoing policy game highlights China's balancing act between financial innovation and risk prevention—effectively curbing disorderly market expansion while preserving necessary space for healthy digital financial development.

#中国央行 # Stablecoin #Digital Renminbi