zhou xiaochuan financial leader

Ex-PBOC Leader Warns Against US Dollar Stablecoins

Key Points:

  • Zhou Xiaochuan cautions against US dollar-backed stablecoins.
  • US dollarization poses systemic economic threats.
  • China prioritizes sovereign digital money over private stablecoins.

Zhou Xiaochuan, former head of the People’s Bank of China, warned about the risks of US dollar-backed stablecoins at the Lujiazui Forum in June 2025, in Shanghai, citing potential financial threats.

US Dollar Stablecoins and Economic Threats

Zhou Xiaochuan, a key figure in China’s financial reforms, criticized US dollar stablecoins, highlighting potential risks. He stressed that such stablecoins could foster “dollarization,” adversely affecting China’s economic stability and monetary sovereignty. “Although other countries are considering issuing their own local-currency stablecoins, their potential global impact remains uncertain, whereas USD-backed stablecoins could have worldwide influence. USD-backed stablecoins may facilitate US dollarisation, and the effects of this remain highly debated … pursuing dollarisation could bring many adverse side effects,” noted Zhou.

Implications for China’s Financial Ecosystem

The warning has implications for China’s market and financial ecosystem. Zhou’s remarks urge caution among institutions considering USD-backed stablecoins. The preference for sovereign digital currency, like e-CNY, is evident, reflecting a strategic prioritization in China’s economic policy.

Geopolitical and Financial Repercussions

The implications for geopolitical and financial realms include increased scrutiny on cross-border stablecoin projects. Zhou’s comments underscore China’s wariness towards US financial influences growing stronger. This cautious stance is consistent amid escalating global stablecoin debates.

Regulatory Considerations

China’s emphasis on regulatory containment could affect upcoming stablecoin technologies. Historical precedents indicate substantial precedence given past warnings, emphasizing economic sovereignty. Expect future policy actions towards stablecoin regulations based on prior evolving trends.

Disclaimer:

The content on nftenex.com is provided for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry inherent risks. Please consult a qualified financial advisor before making any investment decisions.

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