China Curbs Stablecoins, Halts Research and Seminars

Chinese authorities have instructed local firms to stop publishing research or holding seminars related to stablecoins, according to a Friday report from Bloomberg.

Chinese financial regulators have reportedly asked local brokers and other entities to cancel seminars and halt the promotion of research on stablecoins. Citing people familiar with the matter, Bloomberg reported that authorities in the country are concerned that stablecoins could be exploited as a new tool for fraudulent activities.

Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. in Singapore, said Beijing may be aiming to prevent a speculative surge among retail investors.

“There’s still a worry that not everyone knows adequately about crypto and policymakers being pragmatic don’t want herd mentality when investors buy into something that they do not know what the risks are” he said.

Related: China’s crypto liquidation plans reveal its grand strategy

China takes hold of its financial ecosystem

The move follows a series of regulatory steps aimed at tightening control over digital assets, including rules requiring the country’s banks to monitor and flag risky trades involving crypto assets. Monitored activities include cross-border gambling, underground banks and illegal cross-border financial activities involving crypto assets.

Still, while China imposes strict rules on its mainland territory, it appears to be leveraging stablecoins where it best suits its objectives. Hong Kong is often viewed as China’s regulatory sandbox, and it has recently implemented a new stablecoin issuance framework with a six-month transition period accompanied by special rules.