Breaking News: Chinese regulators may be迎来 a "significant" Crypto Assets monetary policy shift.

China may adjust its tough stance on Crypto Assets. According to a Reuters report on July 11, the Shanghai regulatory body, the State-owned Assets Supervision and Administration Commission (SASAC), recently held a meeting to discuss a "strategic response" to digital assets, including stablecoins. This move marks a significant policy development against the backdrop of China's current ban on Crypto Assets trading and Mining.

Shanghai: A Testing Ground for Financial Reform

As a major financial center in China, Shanghai's nominal GDP reaches 729 billion USD in 2024, playing a pioneering role in financial reform for a long time. The central government usually grants Shanghai greater policy experimentation space, and this meeting shows an open attitude towards Crypto Assets. Shanghai's regulatory chief, He Qing, emphasized at the meeting the need to "demonstrate greater sensitivity to emerging technologies and strengthen research on digital currency." The meeting had about 60 to 70 participants, highlighting the breadth of the discussions.

Enterprises drive international competitive pressure

Chinese companies may play a key role in policy changes. It is reported that e-commerce giant JD (9618.HK) and fintech leader Ant Group (688688.SS) are actively pushing for the People's Bank of China to approve the issuance of a stablecoin pegged to the Renminbi to counter the global influence of US dollar stablecoins. The two companies plan to apply for a stablecoin license in Hong Kong, where related legislation will take effect on August 1.

At the same time, the rapid acceptance of Crypto Assets in the United States is putting pressure on China. American companies such as Amazon (AMZN.O) and Walmart (WMT.N) have taken action in the crypto field, while the price of Bitcoin has recently soared to an all-time high of $112,000. These international trends may prompt China to reevaluate its stance on digital assets.

Stablecoins and Regulatory Challenges

Stablecoins have rapidly developed globally due to their linkage to fiat currencies, low transaction costs, and fast speeds. At the Shanghai conference, policy experts from Guotai Junan Securities detailed the history, types, and global regulatory framework of Crypto Assets and stablecoins, and proposed policy recommendations. However, Pan Gongsheng, the governor of the People's Bank of China, recently stated that the vigorous development of digital currency poses significant challenges to financial regulation. In 2021, mainland China comprehensively banned Crypto Assets trading and Mining due to concerns over financial stability, and any policy easing will be cautious and gradual.

The recent conference in Shanghai has signaled that China may take a tentative step in the digital asset field. As a bastion of financial innovation, Shanghai could become a testing ground for crypto-friendly policies. If policies are gradually relaxed, the introduction of a renminbi stablecoin may reshape China's role in the global digital economy. However, considering the complexity of regulation and the priority of financial stability, any changes will face rigorous scrutiny.