The Central Bank governor's latest statement on stablecoins: closely monitoring the development of overseas stablecoins.

Source: People's Bank of China

On October 27, 2025, at the opening ceremony of the Financial Street Forum Annual Conference, Pan Gongsheng, Governor of the People's Bank of China, stated that in recent years, virtual currencies issued by market institutions, especially stablecoins, have been continuously emerging, but overall they are still in the early stages of development. International financial organizations and financial management departments such as central banks generally hold a cautious attitude towards the development of stablecoins.

Pan Gongsheng stated that the regulation of digital currencies and stablecoins has become an important component of China's macroprudential management system. In the future, the People's Bank of China will take stability as the general tone and comprehensively promote the construction of a dual-pillar framework of monetary policy and macroprudential policy, continuously enhancing the resilience and stability of the financial system.

Since 2017, the People's Bank of China, together with relevant departments, has issued multiple policy documents to prevent and address the risks associated with domestic virtual currency trading and speculation, and currently these policy documents remain in effect. Next, the People's Bank will continue to work with law enforcement agencies to combat the operation and speculation of virtual currencies within the country to maintain economic and financial order, while closely monitoring and dynamically assessing the development of overseas stablecoins. The following is the original text of the speech:

Dear Vice Premier He Lifeng, Secretary Yin Li, Mayor Yin Yong, esteemed guests:

Hello everyone!

Just now, Vice Premier He delivered an important speech, which has significant guiding importance for us to deeply study and implement the spirit of the Fourth Plenary Session of the 20th Party Congress, accurately grasp the situation and tasks, and solidly carry out various tasks related to macroeconomic regulation and the stable development and opening of finance during the “14th Five-Year Plan” period. We will earnestly implement this.

I would like to express my sincere gratitude to the Beijing Municipal Party Committee, the Municipal Government, especially Secretary Yin, Mayor Yin, and all sectors of society for their ongoing concern and support for the work of the People's Bank.

First, I will briefly explain a few issues that have attracted attention in the recent market.

First, regarding the moderately accommodative monetary policy. For more than a year, in the face of a complex and severe domestic and international situation, we have adhered to a supportive monetary policy stance in accordance with the central government's decision-making deployment, under the specific guidance of Vice Premier He. We have comprehensively utilized various monetary policy tools, including quantitative, price, and structural measures, to maintain ample liquidity. The main macro-financial indicators reflecting financial operations also demonstrate the state of moderately accommodative monetary policy. By the end of September, the scale of social financing increased by 8.7% year-on-year, M2 increased by 8.4% year-on-year, and loans increased by 6.6%. After adjusting for the impact of local debt replacement, loan growth was approximately 7.7%. The cost of social financing is also at a historical low, creating a favorable monetary and financial environment for the recovery and improvement of our economy and the stable operation of the financial market.

We will continue to uphold a supportive monetary policy stance, implement a moderately accommodative monetary policy, comprehensively utilize various monetary policy tools, provide short-term, medium-term, and long-term liquidity arrangements, and maintain relatively loose social financing conditions. At the same time, we will continue to improve the monetary policy framework and strengthen the implementation and transmission of monetary policy.

Second, regarding the central bank's buying and selling of government bonds in the open market. Last year, the People's Bank of China implemented the deployment of the Central Financial Work Conference and began trading government bonds in the secondary market. This is an important measure to enrich the toolkit of monetary policy, enhance the financial functions of government bonds, play the role of the government bond yield curve as a pricing benchmark, and promote the mutual coordination of monetary policy and fiscal policy. It is also beneficial for the reform and development of our bond market and for financial institutions to improve their market-making and pricing capabilities. In practice, the People's Bank of China flexibly carries out two-way operations of buying and selling government bonds based on the need for base currency issuance, while considering the supply and demand of the bond market and changes in the yield curve. This ensures smooth transmission of monetary policy and stable operation of the financial market. Earlier this year, considering the significant pressure of imbalance in supply and demand in the bond market and the accumulation of market risks, we suspended the buying and selling of government bonds. Currently, the overall operation of the bond market is good, and we will resume the trading of government bonds in the open market.

Third, regarding the digital renminbi and market-oriented virtual currencies. The digital renminbi is a legal digital currency issued and regulated by the People's Bank of China, compatible with emerging technologies such as distributed ledger technology. After steady progress in recent years, the ecosystem for digital renminbi has been initially established. Next, the People's Bank of China will further optimize the management system for digital renminbi, study and refine its positioning within the monetary hierarchy, and support more commercial banks to become operational institutions for digital renminbi services. We have established an international operation center for digital renminbi in Shanghai, responsible for cross-border cooperation and use of digital renminbi; and a digital renminbi operation management center in Beijing, responsible for the construction, operation, and maintenance of the digital renminbi system, promoting the development of digital renminbi, and contributing to the construction of the national financial management center in the capital.

In recent years, virtual currencies issued by market institutions, especially stablecoins, have been emerging continuously, but overall they are still in the early stages of development. Financial management departments such as international financial organizations and central banks generally hold a cautious attitude towards the development of stablecoins. Ten days ago, at the IMF/World Bank annual meeting held in Washington, stablecoins and the potential financial risks they may pose became one of the main topics of discussion among finance ministers and central bank governors from various countries. The prevailing viewpoint mainly focuses on the fact that, as a financial activity, stablecoins currently cannot effectively meet the basic requirements for customer identity verification, anti-money laundering, and other aspects, which amplifies the gaps in global financial regulation, such as money laundering, illegal cross-border fund transfers, and terrorist financing. The atmosphere of market speculation is strong, increasing the vulnerability of the global financial system and impacting the monetary sovereignty of some underdeveloped economies.

Since 2017, the People's Bank of China, in conjunction with relevant departments, has issued multiple policy documents to prevent and address the risks of speculation in domestic virtual currency trading. These policy documents remain effective. In the next step, the People's Bank of China will continue to work with law enforcement agencies to crack down on domestic virtual currency operations and speculation, maintain economic and financial order, and closely monitor and dynamically assess the development of overseas stablecoins.

Fourth, study and implement policy measures to support individual credit repair. The credit reporting system operated by the People's Bank of China is an important financial infrastructure that records financial default behaviors of enterprises and individuals, allowing financial institutions to query and assess risks during business operations. For over 20 years, it has played a crucial role in the construction of the social credit system in our country and in preventing financial risks. According to the “Regulations on the Administration of Credit Reporting Industry,” the retention period for default records in the credit reporting system is 5 years. In recent years, due to the impact of the COVID-19 pandemic and other force majeure events, some individuals have experienced debt defaults. Although they have fully repaid their debts afterward, the relevant credit records still continue to affect their economic lives. To help individuals accelerate the repair of their credit records while also exerting the binding effect of default credit records, the People's Bank of China is studying the implementation of a one-time personal credit relief policy. For individual default information related to defaults below a certain amount that have been repaid since the pandemic, this information will not be displayed in the credit reporting system. This measure will be executed early next year after fulfilling the relevant procedures, with necessary technical preparations conducted by the People's Bank of China in conjunction with financial institutions.

My speech topic today is: The construction practice and future evolution of China's macro-prudential management system.

The 19th National Congress of the Communist Party proposed to improve the dual-pillar regulatory framework of monetary policy and macro-prudential policy. In recent years, we have made orderly progress and achieved significant advancements. The recently convened Fourth Plenary Session of the 20th Central Committee further proposed to establish a scientific and robust monetary policy system and a comprehensive macro-prudential management system. At the Lujiazui Forum in June last year, I provided a relatively systematic introduction to the evolution of China's future monetary policy framework. Today, I would like to share some considerations on building a macro-prudential management system.

1. The Intrinsic Logic of Macroprudential Management and China's Practices

After the 2008 international financial crisis, the international community conducted a profound reflection on the causes and lessons of the crisis, realizing that the stability of individual financial institutions does not represent the overall stability of the financial system. It is necessary to address the shortcomings of micro-prudential regulation, strengthen macro-prudential policy responses, prevent the pro-cyclical accumulation of financial risks, as well as contagion across institutions, markets, sectors, and borders, and strengthen macro-prudential management as the core content of international financial regulatory reform.

Within the G20 framework, international organizations and major economies have made continuous efforts to establish and improve the macro-prudential management policy framework, reform and perfect the financial regulatory system, and strengthen the monitoring and assessment of systemic financial risks. Central banks, as macroeconomic regulators and financial management departments, are also the last lenders in the financial system, and they generally bear important responsibilities in the macro-prudential management systems of various countries.

After years of practice, a relatively strong operational macro-prudential management system has initially formed globally. During the COVID-19 pandemic in 2020, in addition to adopting supportive monetary policies, major economies generally employed macro-prudential policy measures such as reducing countercyclical capital buffers and liquidity regulatory requirements to respond to significant shocks. After the pandemic, they also pushed the macro-prudential policy stance back to neutral, demonstrating good flexibility, enhancing the resilience and robustness of the global financial system, and increasing the space and capacity for countercyclical adjustment.

Monetary policy, macroprudential management, and microprudential regulation each have their own focus. Monetary policy primarily targets macroeconomic and aggregate demand management, smoothing economic cycle fluctuations through counter-cyclical adjustments to create a suitable monetary and financial environment for stable economic growth and stable operation of financial markets. Microprudential regulation mainly focuses on the sound operation of individual financial institutions, utilizing various regulatory means to promote prudent and stable operations of financial institutions. Macroprudential management, on the other hand, directly and centrally affects the financial system itself, concentrating on risks with systemic characteristics, maintaining the overall stability of the financial system, and interrupting or weakening the pro-cyclical self-reinforcement of the financial system and cross-institutional, cross-market contagion of risks. From a cross-temporal perspective, it mainly imposes dynamic counter-cyclical requirements on capital levels, leverage ratios, etc., to curb the pro-cyclicality of the financial system. From a cross-spatial perspective, it mainly strengthens the supervision of systemically important financial institutions and macroprudential management of financial markets to prevent and control risk contagion across institutions, markets, sectors, and borders. The three have some overlap in terms of tools, complementing each other. For example, the capital adequacy ratio requirement is a microprudential regulation tool, but additional capital regulation is a macroprudential management tool; the level of provisioning coverage according to accounting principles and expected loss principles is a microprudential regulation tool, while using provisions for counter-cyclical adjustments during the economic and banking profit upswing or downturn is a macroprudential management tool.

China's exploration and practice of macroprudential management began relatively early. As early as 2003, China introduced the minimum down payment ratio policy in the real estate finance sector. After the 2008 international financial crisis, China was the first in the world to initiate the construction of a macroprudential policy framework, gradually forming a macroprudential management practice path with Chinese characteristics.

In terms of the governance mechanism for macroprudential management, strengthen the centralized and unified leadership of the Party Central Committee and enhance the macroprudential management functions of the People's Bank of China. At the inter-departmental level, in 2013, the State Council approved the establishment of a financial regulatory coordination inter-ministerial joint meeting system led by the People's Bank of China; in 2017, the State Council Financial Committee was established; in 2023, the Central Financial Committee was established, gradually strengthening overall coordination. At the departmental level, the 2017 National Financial Work Conference and the institutional reform plan approved by the Central Committee in early 2019 clarified the responsibilities of the People's Bank of China in macroprudential management, leading the establishment of a macroprudential policy framework and setting up a Macroprudential Management Bureau.

In terms of the macro-prudential management policy system, the People's Bank of China has made explorations and advancements from multiple dimensions. First, in 2021, the “Macro-Prudential Policy Guidelines” were released, clarifying the macro-prudential management ideas and policy framework. Second, the differentiated reserve requirement system was established in 2003, and a dynamic adjustment mechanism was introduced in 2010. On this basis, it was upgraded to the Macro-Prudential Assessment (MPA) in 2016, linking credit issuance with the capital levels of financial institutions and economic growth, which effectively promoted stable growth in monetary credit. Third, a comprehensive regulatory framework for systemically important financial institutions was established and improved. In conjunction with financial regulatory departments, guidelines were released on “Improving the Regulation of Systemically Important Financial Institutions,” “Assessment Methods for Systemically Important Banks,” “Additional Regulatory Provisions for Systemically Important Banks,” “Management Methods for Total Loss Absorbing Capacity of Global Systemically Important Banks,” and “Assessment Methods for Systemically Important Insurance Companies,” implementing requirements for additional supervision and recovery plans for systemically important banks. Currently, there are 5 global systemically important banks and 20 domestic systemically important commercial banks in China, with total assets accounting for about 70% of the banking sector's total assets. Fourth, cross-border financing macro-prudential adjustment parameters and other tools were established to implement counter-cyclical adjustments to cross-border capital flows. Fifth, explorations have been made to conduct macro-prudential management of the financial market. Dynamic observation and assessment of bond market operations, strengthening risk alerts for financial institutions, and blocking or weakening the accumulation of risks. In conjunction with the China Securities Regulatory Commission, two monetary policy tools to support the capital market were established. The decisive role of the market in exchange rate formation is upheld, maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level, and preventing significant fluctuation risks. Sixth, the macro-prudential management of real estate finance was improved. Policies such as dynamic adjustments to mortgage down payment ratios and mortgage interest rates were implemented. Seventh, a regulatory framework for financial holding companies was built, and the admission and regulation of financial holding companies were conducted in accordance with the law. Currently, this work has been incorporated into the Financial Regulatory Administration. Eighth, market expectation management was strengthened. When significant fluctuations occur in the financial market, proactive communication is made to promptly correct the market “herd effect” and firmly maintain stability in the stock market, bond market, foreign exchange market, and other financial markets.

II. The Evolution Direction of China's Macro-Prudential Management System

In comparison, monetary policy is a traditional responsibility of central banks, with a relatively clear and mature institutional framework; although there have been many practices in global macroprudential management, it is still in its early stages and is continuously being explored and improved. The draft proposal of the “14th Five-Year Plan” suggests the need to establish a comprehensive macroprudential management system. We believe there are several key areas of focus.

First, better coverage of the relationship between macroeconomic operation and financial risks. The high-quality development of the macroeconomy is the foundation for the stable operation of financial markets and the healthy management of micro financial institutions. It is necessary to closely monitor and assess the operation of the macro economy, grasp the dynamic balance of economic growth, economic structural adjustment, and financial risk prevention at the macro level, and persist in promoting high-quality economic development to prevent and resolve systemic financial risks from the source.

Second, better coverage of the operation of the financial market. With the advancement of financial modernization, China's financial system is gradually evolving from a traditional banking-dominated structure to a multi-level modern financial market system, and the complexity and interconnectivity of the financial system have significantly increased. It is necessary to continuously broaden the coverage of macro-prudential management based on the development and changes in the financial market, enhancing the resilience of the financial system.

Thirdly, better coverage of systemically important financial institutions. Systemically important financial institutions are large and highly interconnected; once they are at risk, they have a strong spillover effect. In recent years, major economies have generally strengthened macro-prudential management of systemically important financial institutions and gradually expanded the coverage from the banking sector to the non-banking financial sector. It is necessary to comprehensively assess and identify systemically important banks, insurance companies, and other financial institutions and financial infrastructures, and to implement additional regulatory measures that match their level of systemic importance on top of regular supervision.

Fourth, better cover the spillover effects of international economic and financial market risks. The correlation of global financial markets has increased, information spreads rapidly, and financial risks are more easily transmitted across borders. During this year's International Monetary Fund/World Bank annual meetings, there was a significant focus on the government debt risks of major economies and their potential impacts on global financial markets, as well as strengthening early risk warnings. We need to grasp the relationship between internal balance and external balance, dynamically assess and effectively respond to the impacts of major economies' monetary policies, trade policies, sovereign debt risks, and geopolitical factors on the operation of our financial markets.

III. Accelerate the establishment of a comprehensive macro-prudential management system

The macro-prudential management system is a comprehensive set of institutional arrangements that plays an active role in preventing systemic financial risks. In the next phase, the People's Bank of China will focus on advancing work in four areas.

First, strengthen the monitoring and assessment system for systemic financial risks. In terms of monitoring, continuously enhance the dynamic monitoring capabilities of the national financial database for key area risks; fully leverage the role of the interbank market trading report database to frequently gather and monitor financial market trading behaviors. In terms of assessment, the macro-prudential assessment (MPA) established by the People's Bank in 2016 currently serves more for monetary policy. We are studying the division of MPA into two parts. One part focuses on assessing the implementation of monetary policy; the other part focuses on macro-prudential and financial stability assessments, serving macro-prudential management. Currently, a preliminary plan has been formed, and we will communicate with financial institutions in the future to further refine it before implementation.

Second, improve and strengthen risk prevention measures for key institutions and key areas. Strengthen the additional supervision of systemically important banks, fully utilize the functions of counter-cyclical capital buffers, recovery and resolution plans, etc. Release the list of systemically important insurance companies in a timely manner to promote the implementation of additional supervision. Expand the macro-prudential management function of the central bank to maintain financial market stability. Focus on the leverage levels and maturity mismatches of financial institutions, timely prevent the accumulation of liquidity risks and interest rate risks in the financial market, and curb the “herd effect” in the financial market. Improve the supervision of financial market infrastructure, establish liquidity risk constraints and liquidity support mechanisms for central counterparties. Continuously enhance the macro-prudential management of cross-border capital flows, taking counter-cyclical regulatory measures in a timely manner according to the situation to maintain overall stability of cross-border capital flows. Effectively carry out macro-prudential management of real estate finance, improve the analysis framework for real estate finance, and optimize the foundational system for real estate finance.

Thirdly, continuously enrich the macro-prudential management toolbox to enhance systematic, standardized, and practical levels. After years of practice, the People's Bank of China has accumulated a relatively rich system of macro-prudential and financial stability tools. For financial institutions, there are tools such as additional capital and additional leverage ratio requirements for systemically important banks, central bank financial institution ratings, stress testing, leverage ratio constraints, countercyclical capital buffers, countercyclical provisioning adjustments, total loss-absorbing capacity, recovery and resolution plans for systemically important financial institutions, and differentiated risk premium rates for deposit insurance. For financial markets, in the foreign exchange market, there are tools like forward foreign exchange sales risk reserves and macro-prudential adjustment parameters for cross-border financing. In the bond market, there are tools such as leverage levels, maturity mismatch management, and window guidance. In the stock market, there are two monetary policy tools to support the stable development of the capital market, which assist the Hong Kong Monetary Authority in playing the role of a “quasi-stabilization fund.” One issue we are considering is how to comprehensively balance the maintenance of stability in financial markets with the prevention of moral hazards in financial markets, exploring mechanisms for providing liquidity to non-bank institutions in specific scenarios. For the real estate finance sector, the main tools include down payment ratios, interest rates, risk weights for real estate loans, and household debt-to-income ratios. For risk disposal resources, there are deposit insurance funds and financial stability guarantee funds, with the People's Bank of China fulfilling its role as the lender of last resort in accordance with the law. We will continue to expand and enrich the macro-prudential management toolbox and dynamically assess and optimize it.

Fourth, continuously improve the collaborative and efficient macro-prudential management governance mechanism. Macro-prudential management especially requires coordinated planning. At the beginning of this year, the People's Bank of China established a Macro-Prudential and Financial Stability Committee to strengthen analysis, research, communication, coordination, and implementation of major issues related to macro-prudential management and financial stability. In the next step, the People's Bank of China will strengthen the coordination among monetary policy, macro-prudential management, micro-prudential regulation, as well as coordination with fiscal policy, industrial policy, etc., under the leadership of the central government, to form a joint force. Serious financial discipline, market discipline, and regulatory rules must be upheld to prevent risk spillover and moral hazard. Accelerate the promotion of legislation and amendments to laws such as the People's Bank of China Law and the Financial Stability Law to strengthen the legal protection of macro-prudential management.

Building a macro-prudential management system is an ongoing dynamic process that requires the joint efforts and efficient collaboration of all parties involved. The People's Bank of China will earnestly implement the requirements of the 14th Five-Year Plan, working together with all parties to accelerate the establishment of a comprehensive macro-prudential management system and promote high-quality economic and financial development.

Finally, I wish this forum great success, thank you all!