China Cracks Down on Stablecoin Promotion Amid Surging OTC Crypto Demand

Chinese regulators have instructed financial institutions to halt all stablecoin promotion efforts, including research reports and seminars. The MOVE aims to curb speculative fervor as authorities express concerns about potential fraud and herd mentality driving risky investments.

Despite China's blanket crypto ban, over-the-counter trading remains robust. Chainalysis data reveals $75 billion in digital asset transactions occurred through OTC channels during the first three quarters of 2024. "Policymakers deliberately avoid creating hype around certain asset classes to prevent irrational market behavior," noted Christopher Wong of OCBC.

Hong Kong emerges as a regulatory counterpoint, implementing Asia's first comprehensive stablecoin framework on August 1. The special administrative region continues advancing its ambitions to become a digital asset hub while mainland authorities maintain their restrictive stance.