Wang Yongli | Why China is Firmly Halting Stablecoins

1⃣ China’s strategy is set: strengthen the digital yuan and continue strict crackdowns on virtual currencies and stablecoins.

2⃣ USD stablecoins have a market share of over 99%, and their ecosystem is already mature. If other countries try to launch their own fiat stablecoins, the global space is extremely limited, and the input-output ratio is hardly convincing.

3⃣ US stablecoin legislation essentially serves the interests of the US dollar and US Treasuries, absorbing on-chain liquidity into the controllable US dollar system—“America First”—rather than paying for global financial stability.

4⃣ As crypto assets become compliant, bank deposits are tokenized, and RWAs are put on-chain, it will eventually squeeze or even replace the current role of stablecoins. For latecomer countries to follow the stablecoin route, they are likely betting on the wrong track.

5⃣ For China, a RMB stablecoin offers no domestic advantage and poses cross-border risk control concerns. The optimal solution is: strict regulation of virtual currencies and stablecoins on one hand, and betting on the digital yuan and compliant on-chain financial infrastructure on the other.

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