Former Governor of the Central Bank of China rejects the idea of allowing Yuan Stablecoins
By Hannah Pérez
The Global Stablecoins boom is generating internal debates in China. Zhou XiaoChuan, former governor of the Popular Bank of China, expressed concern about the dangers -even before Stablcoins backed by Yuanes.
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- The Global Stablecoins boom is generating internal debates in China.
- Zhou XiaoChuan, former governor of Banco Popular de China, speaks against.
- He warned about the dangers of stablcoins for financial stability.
- Contrast with the reports that suggest that China could allow stablcoins backed by yuan.
- The Chinese government would seem to counteract the hegemony of the dollar.
In the midst of growing discussions about a possible change in Chinese policy towards digital assets, the former governor of the Popular Bank of China (PBOC) has expressed a firm opposition to the idea that Asian power opens up to the Stablecoins.
Zhou XiaoOChuan, who led the Central Bank of China between 2002 and 2018, expressed concern about the dangers of the Stablecoins At a closed door meeting in July, according to a publication on Wednesday by the group of economic experts CF40, based in Beijing, which was reviewed by the news agency Bloomberg.
Although it is not specified who participated in the meeting, it was reported that the former official warned about the risks that represent the Stablecoins For financial stability, arguing that they could encourage speculation and fraud.
Comments against recent reports that suggest that the Chinese government could be evaluating the issuance of these tokens anchored to Yuan to promote their international use and challenge the hegemony of the US dollar.
Former governor warns about Stablecoins
According to the report, Zhou warned that Stablecoins They could encourage speculation, which could destabilize the financial system and increase the risk of fraud.
The former official emphasized that existing retail payments systems, which include third -party platforms, the Central Bank digital currency (CBDC), digital wallets and a compensation infrastructure, are already advanced enough, describing them as “highly efficient and low cost “ and subtracting a need for integration from Stablecoins.
“They have become very efficient and low cost, which leaves very little margin so that new participants achieve greater cost savings or benefits in this area”he said, highlighting the benefits of existing payment systems and arguing against the idea of an opening towards the tokens class with fiduciary parity.
In addition, the former governor stressed the need for greater transparency and regulation in financial markets, criticizing current frameworks in places like the United States, Hong Kong and Singapore for not offering sufficient guarantees of support in liquid reserves.
“We must be attentive to the risk of stablingins being used excessively for speculative asset trade,” Zhou warned, citing the potential for instability and price manipulation that could lead to systemic fraud.
Stablecoins motivate internal debate in China
This vision contrasts with a recent report from Reuters which indicates that the Council of State of China could approve this month a plan to explore Stablecoins backed by Yuan. The objective would be to boost the global adoption of the Chinese currency and counteract the domain of the US dollar, which currently supports more than 98% of tokens in the market of Stablecoins.
This approach would mark a notable turn regarding the generalized prohibition of cryptocurrencies imposed by China in 2021, and which is maintained until today, and occurs at a time of global interest in the stablecoins. The Stablecoins market has grown over a capitalization of USD $ 290 billion driven by regulatory clarity in jurisdictions such as the US and Europe.
Despite the interest in financial innovation, Chinese authorities maintain a cautious attitude. Recently, directives have been issued to prevent local entities from promoting or informing about Stablecoinsin order to mitigate speculative enthusiasm.
Zhou, known for his reforms in monetary policy and his past defense of a “super sovereign reserve currency”To reduce the dependence of the dollar, it positions its criticism as a defense of the advances already achieved in digital payments by the Chinese government without the need for decentralization or tokenization.
The internal debate could reflect China’s tensions between the search for global competitiveness and the priority of maintaining centralized surveillance, especially with the digital yuan (e-cny) as the main axis. While Hong Kong and Shanghai advance in local regulations, the future of Stablecoins In Continental China it is still uncertain, with the nation maintaining its cautious approach to the crypts.
Article written with the help of AI, edited by Diariobitcoin
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