China’s Stablecoin Crackdown Intensifies as Korea Grapples with Crypto Scams - What You Need to Know Now
Regulatory tremors shake Asian crypto markets as authorities double down on enforcement.
China's central bank issues fresh warnings against stablecoin usage—calling private digital currencies 'direct threats to monetary sovereignty.' The move signals Beijing's unwavering stance against decentralized finance alternatives.
Meanwhile, South Korea confronts a surge in crypto-related fraud schemes. Sophisticated phishing operations and fake exchange platforms drain millions from retail investors monthly. Financial authorities scramble to implement tougher verification protocols.
Market analysts observe capital flight from East Asian exchanges toward offshore platforms—yet another case of regulation chasing innovation rather than guiding it. Traders adapt while regulators play catch-up.
The pattern repeats: innovation outpaces legislation, creating regulatory arbitrage opportunities that would make any investment banker blush—if they weren't too busy shorting the very assets they recommend to clients.
Former PBoC Chief’s Stablecoin Warning
Former People’s Bank of China Governor Zhou Xiaochuan issued comprehensive warnings against stablecoin adoption in China. Zhou’s detailed analysis, published by the CF40 think tank, outlined multiple risks from a central banking perspective. His remarks directly challenge growing calls from policy advisers to embrace digital currencies.
Zhou identified two primary central bank concerns about stablecoins: first, “currency over-issuance,” where operators lack genuine 100% reserves when issuing stablecoins, and second, high leverage amplification effects that create monetary derivative multiplier impacts during circulation. He criticized insufficient regulatory frameworks in the US GENIUS Act and Hong Kong ordinances.
The former governor questioned whether full tokenization could effectively replace account-based payment systems. Also, Zhou warned against excessive use in asset speculation, citing fraud risks and financial instability. He expressed concern about threats to China’s capital controls and monetary sovereignty.
Crypto Voice Phishing Surge in Korea
South Korean voice phishing scams using cryptocurrency have skyrocketed dramatically this year. Police data shows 420 crypto-related voice phishing cases occurred from January to July 2025, a 6.6-fold increase compared to 64 cases during the same period last year.
Scammers typically impersonate prosecutors or financial officials, claiming victims’ accounts were compromised. They demand cryptocurrency purchases worth hundreds of millions of won for “asset verification.” Recent cases involved victims losing 190 million won each in Tether and Bitcoin transfers.
BeInCrypto’s Asian Coverage
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