China Pushes Back on Stablecoins as Global Market Races Toward $1.8 Trillion

His remarks, shared through the Beijing-based CF40 think tank, highlight the growing divide among policymakers as the rest of the world accelerates stablecoin adoption.

Zhou dismissed the idea that yuan-backed stablecoins would bring meaningful benefits, arguing that China’s existing payment rails—Alipay, WeChat Pay, and the digital yuan—are already fast, cheap, and widely accessible. Introducing stablecoins, he cautioned, could invite speculation, fraud, and volatility into the financial sector while undermining Beijing’s strict capital controls.

The warning stands in contrast to calls from other policy advisers who believe China should mirror U.S. efforts to embrace stablecoins, especially as the dollar’s dominance in digital markets grows. Zhou, however, insisted that even regulatory regimes in the U.S., Hong Kong, and Singapore remain too weak to prevent systemic risks from large-scale adoption.

Global Stablecoin Boom

While China hesitates, stablecoins are booming elsewhere. Supply has more than doubled in just seven months, climbing from roughly $130 billion in January 2024 to $270 billion today. Analysts say this growth reflects a surge of capital entering blockchain markets at record speed, with stablecoins acting as the preferred entry point for both retail and institutional investors.

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According to Token Terminal data, adoption has accelerated sharply since 2020, with the strongest momentum arriving in 2025. After two years of stagnation, demand is once again on the rise, supporting broader crypto activity across decentralized finance and cross-border payments.

If current trends hold, the global stablecoin market could reach $1.8 trillion in supply by 2028—a size that would make it comparable to major segments of traditional finance. Proponents argue that stablecoins will improve efficiency in U.S. payments and provide a powerful bridge between traditional banking and the digital economy.

For China, however, Zhou’s comments suggest policymakers remain wary of the trade-offs. At stake is not just financial stability, but Beijing’s control over capital flows in an increasingly globalized digital economy.

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