Shanghai Opens Stablecoin Talks as China Eyes Digital Currency Shift

Highlights:

• Shanghai officials met to discuss stablecoins, showing a possible shift in China’s approach to digital currencies.
• Hong Kong may lead the stablecoin plans in the country as firms prepare to issue tokens under the new rules.
• China has warned against crypto scams even as stablecoin talks continue to grow in some parts of the country.

Shanghai officials have opened rare talks focused on stablecoins and digital currencies. The Assets Supervision and Administration Commission (SASAC), an ad hoc ministerial-level organization directly subordinated to the State Council, held the meeting last Thursday. Around 70 experts and officials joined the session, including representatives from financial institutions and policy research groups.

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🇨🇳 BREAKING: Shanghai officials held a meeting this week to consider strategic responses to crypto.

Game theory kicks in.. pic.twitter.com/YNRBsv0zch

— cryptothedoggy (@cryptothedoggy) July 11, 2025

During the meeting, SASAC director He Qing urged deeper research into digital currencies. He also called for stronger awareness of emerging technologies. This discussion was prompted by the appeal of businesses and academic scholars to create a stablecoin pegged to the yuan.

Shanghai is still an important financial center in China and has frequently been the epicenter of experimentation in new policy directions. The meeting proposed a more lenient approach despite the country having strict crypto trading and mining bans in place. The reports of companies such as the Guotai Haitong Securities provided an overview of the adoption and use of stablecoins globally and suggested a strategic approach to China. The officials, however, did not specify any immediate shift in rules.

Yuan-Backed Stablecoin Efforts Gain Momentum through Hong Kong

Meanwhile, support for yuan-backed stablecoins is gaining strength in Hong Kong. Experts from the People’s Bank of China have taken note of the rapid expansion of stablecoins globally. They are paying close attention to dollar-based tokens such as USDC and USDT, which dominate global digital payments.

Last month, a local media outlet published an article urging the country to speed up its stablecoin development. PBOC adviser Huang Yiping suggested that Hong Kong could serve as a testing ground for a stablecoin linked to offshore renminbi. He explained that Hong Kong has an existing offshore RMB market. Therefore, the city provides a suitable environment for digital currency experimentation, unlike mainland China, which continues to enforce strict capital controls.

In response to the opened stablecoin talks in Shanghai, companies such as JD.com and Ant Group are preparing to apply for licenses to issue yuan-backed stablecoins through Hong Kong. New rules on stablecoin licensing in the city will take effect on August 1. This framework could help Hong Kong become a leader in the digital asset space across Asia.

Exporters in some provinces of China are already using dollar stablecoins to settle cross-border trades. Therefore, a yuan stablecoin issued in Hong Kong could offer an alternative to dollar dominance. It would also allow digital transactions in renminbi (RMB) without moving the currency outside China’s financial borders.

Warning Signals Persist as Authorities Monitor Crypto Activity

Despite the rising interest in digital currencies, mainland authorities continue to enforce strict controls. On Wednesday, the Beijing Internet Finance Association warned the public about online scams involving terms like “stablecoins,” “Web3,” and “DeFi.” The group stated that these scams often follow pyramid structures and attract unsuspecting investors with false promises.

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