China Tightens Crypto Crackdown, Funds Stablecoin Research

China reaffirmed a hardline stance on cryptocurrencies, with People’s Bank of China Governor Pan Gongsheng saying existing curbs remain in effect and will be enforced in coordination with law enforcement (remarks at the Financial Street Forum). Pan warned stablecoins are nascent, often fail basic KYC/AML standards, foster speculative markets and could undermine financial stability and the monetary sovereignty of less-developed economies, and he reiterated that policies since 2017 remain active. The central bank plans to broaden and optimize the state-backed digital yuan (e-CNY) as a controlled alternative while directing firms to halt private stablecoin initiatives, including in Hong Kong, and targeting onshore operations and speculation. At the same time, Beijing is funding research into stablecoins even as it tightens regulation. These moves contrast with more permissive signals elsewhere, such as the U.S. GENIUS Act, and come amid global efforts like the U.N. Cybercrime Convention to combat transnational digital fraud.