July 16, 2025
By Our Correspondent
Seeing the growing success of stablecoins in Hong Kong and the US, Shanghai appears poised to pursue its own digital currency ambitions, the South China Morning Post reported, citing unnamed Chinese sources.
The move would mark a notable departure from Beijing’s long-standing ban on cryptocurrencies, imposed in 2021. While cryptocurrencies like Bitcoin remain prohibited, Chinese regulators are now reportedly considering the potential of stablecoins—digital currencies typically pegged to the U.S. dollar or other assets—as a lower-risk tool for modernizing cross-border payments and financial infrastructure.
According to the report, Guotai Haitong, a financial services firm owned by the Shanghai municipal government, along with Shanghai Data Group, a state-owned data infrastructure company, will jointly study the feasibility of launching a trial stablecoin program.
The proposal reportedly emerged from a high-level meeting held last Thursday by the Shanghai State-owned Assets Supervision and Administration Commission (SASAC). The meeting, which attracted significant media attention, has been widely interpreted as a sign of Beijing’s growing openness to digital financial innovations—at least within a tightly controlled framework.
At the meeting, Shanghai SASAC director He Qing urged regulators and executives of state-owned enterprises to explore emerging technologies, including digital currencies. “State-owned assets and state-owned companies will play a bigger role in scientific and technological innovation, adjustment of industrial mix, and security support,” He said in an official statement.
The development comes in the wake of comments made by Pan Gongsheng, governor of the People’s Bank of China, at a recent financial summit, where he highlighted the role of stablecoins in enabling cross-border payments.
While China has aggressively promoted its central bank digital currency (CBDC)—the digital yuan, or e-CNY—stablecoins offer another path to digitization, one that could attract institutional interest without the volatility associated with traditional cryptocurrencies.
Observers say the momentum in Hong Kong, where stablecoins were recently legalized under a formal regulatory regime, may be pushing Chinese authorities to reconsider their blanket restrictions on digital assets. For now, however, any experimentation on the mainland is expected to remain strictly confined to state-owned actors and pilot programs, with an emphasis on financial stability and sovereignty.
If successful, the Shanghai initiative could signal a new phase in China’s evolving relationship with blockchain technology—not as a tool of decentralization, but as a new instrument of state-driven innovation.
