China’s Former Central Bank Chief Warns of Stablecoin Risks Amid Market Surge

Zhou Xiaochuan, former governor of the People’s Bank of China, has raised alarms about the destabilizing potential of stablecoins on the country’s financial system. His caution comes as the global stablecoin supply doubles to $270 billion in just seven months—a trend that could challenge China’s capital controls.

The market’s rapid growth contrasts with Zhou’s skepticism. While some policymakers advocate for yuan-backed stablecoins to counter dollar dominance, he argues China’s existing digital payment infrastructure—Alipay, WeChat Pay, and the digital yuan—renders stablecoins redundant. "The supposed efficiencies are exaggerated," he stated during a closed-door Beijing meeting.

Projections suggest the stablecoin market could reach $1.8 trillion by 2028. This expansion highlights the tension between China’s cautious stance and global crypto adoption trends.