China Explores ’Tiered’ Stablecoin Strategy—But Will It Avoid Crypto Chaos?
Beijing's latest stablecoin experiments reveal a fragmented roadmap—one that prioritizes control over innovation. While the tiered approach aims to balance stability with adoption, skeptics question whether bureaucratic layers will strangle progress.
State-backed digital currencies get VIP treatment while private stablecoins face regulatory purgatory. Sound familiar? Just another day in China's love-hate tango with crypto.
Meanwhile, Wall Street banks—still struggling to spell 'DeFi'—continue charging 2% fees for cross-border transfers that stablecoins settle in seconds. Priorities, right?
Critical demand, tiered experiments
At the 2025 Lujiazui Forum held in Shanghai last month, People's Bank of China governor Pan Gongsheng publicly addressed stablecoins for the first time, marking a shift in tone from the country’s central bank.
While acknowledging their potential, Pan warned that technologies like blockchain and distributed ledgers are rapidly reshaping payment systems and shortening cross-border settlement chains, creating urgent regulatory challenges.
“These innovations are accelerating the development of central bank digital currencies and stablecoins, and reshaping traditional payment and settlement systems,” Pan said in Mandarin, according to a browser-based translation of a report from Beijing-based independent outlet Caixin.
But elsewhere in cities with proximity to China's authority, stablecoins remain a policy frontier: closely monitored and cautiously tested.
These moves from China align “with Hong Kong's long-standing, forward-leaning posture on digital assets,” MacPherson said.
“Across the border, Shenzhen remains more guarded under mainland governance,” he said. But if “proofs of concept show stablecoins can advance” certain projects, other cities “may be more likely to open the door to similar adoption.”
That combination of top-down coordination and localized experimentation, MacPherson claimed, reflects China’s digital asset strategy: tight control paired with targeted innovation.
“What may look like divergence is, in practice, tiered experimentation,” he said.
