China’s National Fund Explores Stablecoin Risks Amid Digital Yuan Push

China’s National Natural Science Foundation (NSFC) has launched a research initiative to analyze the systemic risks posed by stablecoins, with particular focus on their impact on the yuan and capital controls. The MOVE signals Beijing’s cautious approach to digital assets even as it promotes its central bank digital currency, the e-CNY.

Private stablecoins could challenge China’s monetary sovereignty, the NSFC warns, raising concerns about financial stability and cross-border capital flows. The research will inform China’s strategy in global digital asset regulation, where it seeks to assert influence without ceding control.

While no specific cryptocurrencies were mentioned in the announcement, the study’s findings could shape policy toward dollar-pegged stablecoins like USDT and USDC, which dominate cross-border crypto transactions. China’s e-CNY ambitions face competition from these private alternatives.