China's Crackdown on Stablecoins and Asia's Advances in Cryptocurrency

The People's Bank of China has intensified its efforts against stablecoins, describing them as a risk to worldwide financial security and pledging to step up its enforcement against crypto-related activities within the country, according to a

. Speaking at the 2025 Financial Street Annual Meeting in Beijing, Pan Gongsheng, the central bank's governor, cautioned that stablecoins—digital tokens tied to fiat currencies such as the U.S. dollar—have introduced fresh risks to the international financial system and may threaten the monetary independence of smaller nations, as reported by Yahoo. He pointed out that stablecoins intensify vulnerabilities in the global financial landscape, referencing their involvement in speculative trading and their inability to comply with regulatory standards like customer verification and anti-money laundering (AML) protocols, according to a . "Stablecoins, as a financial instrument, still fall short of meeting the core criteria for regulatory oversight," Pan remarked, noting that they open gaps that could be exploited for illicit fund movements, terrorism financing, and money laundering, as Yahoo highlighted.

Since 2017, the PBoC has enforced a comprehensive prohibition on cryptocurrency trading, mining, and exchange services, viewing digital currencies as a danger to economic stability while advocating for the government-issued digital yuan (e-CNY) as a more secure solution, according to Yahoo. Pan reaffirmed the central bank's uncompromising stance on privately issued digital currencies, asserting that the measures taken in recent years have proven "effective" and will persist, with the PBoC also set to keep a close watch on overseas stablecoin trends, signaling ongoing caution toward external influences on China's financial system.

In contrast to China's approach, DBS Bank and Goldman Sachs have completed the first over-the-counter (OTC) cryptocurrency options trade between banks, representing a significant milestone for institutional adoption of digital assets in Asia, according to a

. The deal featured cash-settled and Ether options, providing both institutions with tools to manage risks associated with crypto-linked products. Jacky Tai, DBS's Head of Trading and Structuring, described the transaction as evidence of how established financial institutions can incorporate best practices into the digital asset space. DBS noted that its clients executed more than $1 billion in crypto options and structured note transactions in the first half of 2025, with trading activity increasing by nearly 60% from the previous quarter. Goldman Sachs, a pioneer in crypto derivatives, commented that the trade demonstrates a shifting market environment and anticipates further expansion as institutional players become more engaged.

Japan has also positioned itself as a significant force in the stablecoin sector, introducing JPYC EX—the nation's first fully authorized digital yen under the updated Payment Services Act—according to a

. This yen-backed stablecoin operates on blockchains such as , Polygon, and Avalanche, with full reserves held in yen deposits and government securities, as outlined in a . JPYC's goal is to secure 2% of the worldwide stablecoin market, aiming for a $70 billion valuation by 2030. Experts see this as a calculated move to connect traditional finance with Web3, enabling instant, low-fee yen transfers for business, payroll, and international payments.

Although China's absence from the global stablecoin market has not stopped its expansion—total stablecoin capitalization now surpasses $308 billion—analysts observe that the lack of China's large fintech sector limits the industry's growth potential. Nevertheless, underground use of dollar-linked stablecoins continues in China, with investors turning to offshore platforms to protect themselves from yuan fluctuations.