Shanghai’s Assets Supervision Commission Deliberating On Policy For Stablecoins And Cryptos
The boom in digital currencies is posing a huge challenge to financial regulations
The Assets Supervision and Administration Commission (ASAC) has held a meeting for local government officials to consider strategic responses to stablecoins and digital currencies.
This is a marked shift for Mainland China, which banned cryptocurrency trading and mining in 2021 due to concerns about the stability of the financial system.
The move by State-owned Shanghai regulator follows calls by experts and major companies in China to develop a yuan-pegged stablecoin. Shanghai is China’s main international financial hub and often leads pilot programs for regulatory change.
He Qing, the ASAC director posted on the official WeChat account stating that they needed to have “greater sensitivity to emerging technologies and enhanced research into digital currencies.”
The meeting was attended by 60-70 officials.
Meanwhile, Stablecoins are pegged to a fiat currency and offer faster and cheaper transactions. These have gained momentum worldwide.
In the U.S., where the legal framework is more developed, several companies including Amazon and Walmart, are contemplating to launch stablecoins.
In China, e-commerce firm JD.com and fintech giant Ant Group are the central banks to authorise yuan-based stablecoins to counter the growing sway of U.S. dollar-linked cryptocurrencies. The companies plan to stablecoin licences in Hong Kong, as the legislation would be effective on 1 August.
A policy expert from Guotai Haitong Securities spoke at the Shanghai meeting about the history, types and characteristics of cryptocurrencies and stablecoins.
While analysing the global regulatory frameworks and strategic approaches, he explained the opportunities and challenges facing stablecoins and offered policy suggestions for digital currency development.
In addition to stablecoins, other digital currencies have become popular. Bitcoin climbed to an all-time high of $112,000.
However, any change may not happen easily in China.
Recently, the central bank governor Pan Gongsheng expressed that the boom in digital currencies and stablecoins posed huge challenges to financial regulations.