China Takes Steps to “Cool Frenzy” Around Stablecoin Market: Report
Main Idea
Chinese authorities are taking steps to regulate the stablecoin market to prevent excessive hype and risks, while Hong Kong is advancing stablecoin regulation by issuing licenses to key Chinese-backed firms.
Key Points
1. Chinese authorities have informally instructed local brokerages and financial institutions to curb the growing frenzy around stablecoins.
2. Regulators are concerned about the increasing number of money laundering cases and aim to prevent a 'herd mentality' among uninformed investors.
3. Despite the crackdown, underground digital asset trading in China reached approximately $75 billion in the first nine months of 2024.
4. Hong Kong is actively building a regulated crypto hub, with state-backed Chinese firms like CMB International Securities and Guotai Junan Securities receiving crypto licenses.
5. China's central bank governor, Pan Gongsheng, has publicly commented on the dual approach of regulating stablecoins differently in mainland China and Hong Kong.
Description
China halts stablecoin research and seminars amid concerns over financial risks. OTC crypto trading in China remains high despite strict bans and local risk warnings. Hong Kong advances stablecoin regulation, issuing licenses to key Chinese-backed firms. Chinese authorities have quietly told local brokerages and financial institutions to stop promoting stablecoins, a move designed to cool the growing frenzy around the asset class, according to a Bloomberg report . Regulators Move to “Cool the Hy...
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