China's Stablecoin Debate: Ex-PBOC Chief Cites Financial Risks
Ex-PBOC Chief Rejects China’s Stablecoin Push
China's stablecoin policy is a contentious issue, with differing opinions among policymakers. Former People’s Bank of China (PBOC) Governor Zhou Xiaochuan has cautioned against a hasty embrace, citing potential financial risks. His concerns come as global stablecoin supply continues to surge, with projections estimating a $1.8 trillion market by 2028 if current growth trends persist.
Zhou Xiaochuan Warns Stablecoins Could Threaten China’s Financial Stability
Zhou Xiaochuan, speaking at a private meeting in Beijing, argued that yuan-pegged stablecoins could destabilize China’s financial system. His comments, published by the CF40 think tank, directly oppose views from policy advisors who advocate for China to emulate the United States by adopting stablecoins.
Zhou argued that the benefits of stablecoins are often overstated, especially in China, where existing retail payment networks like Alipay, WeChat Pay, and the digital yuan already offer efficient and low-cost services. He challenged claims about expensive cross-border transfers and warned that stablecoins could become speculative tools vulnerable to manipulation and fraud.
He also expressed skepticism about the regulatory frameworks in the U.S., Hong Kong, and Singapore, deeming them insufficient to prevent market destabilization if stablecoins achieve widespread adoption. Zhou emphasized that embracing stablecoins could weaken Beijing’s ability to enforce capital controls, a critical element of its financial strategy. This stance contrasts with recent reports suggesting China is considering yuan-backed stablecoins to challenge U.S. dollar dominance.
Global Stablecoin Market Surges Toward $1.8 Trillion as Adoption Accelerates
Despite China’s cautious approach, the global stablecoin market is experiencing rapid growth. The total supply has doubled in the last seven months, increasing from $130 billion in January 2024 to approximately $270 billion today.
Data indicates consistent growth in stablecoin use since 2020, with a notable surge expected in 2025. After a period of stagnation in 2022 and 2023, renewed demand is driving expansion. Stablecoins have become a primary entry point for investors into the crypto ecosystem, making their supply a key indicator of market health.
Based on current trends, the stablecoin market could reach $1.8 trillion by 2028, positioning stablecoins as a significant category within the cryptocurrency economy, comparable to traditional financial instruments.
This expansion reflects growing institutional interest, increased cross-border usage, and deeper integration with decentralized finance (DeFi) platforms. Codeum provides security audits for DeFi platforms, ensuring the safety of users engaging with stablecoins and other digital assets.