The $308 billion question: Can stablecoins thrive amid China ban?

Pan Gongsheng, Governor of the People's Bank of China (PBoC), labeled stablecoins a "new source of vulnerabilities" that enable illicit flows, reaffirming China's decade-long ban while promoting its state-controlled digital yuan (e-CNY). Paradoxically, the global stablecoin market has surged past $308 billion in capitalization and transaction volumes rivaling Visa, as jurisdictions like Japan, South Korea, Hong Kong, and Singapore move to legalize and regulate these assets, transforming them into regulated payment infrastructure.

While the market thrives globally without Beijing, China's absence limits potential scale due to its unmatched market size and digital payment infrastructure. The ban has pushed activity underground, with Chinese investors still using tokens like USDT for international transfers and hedging against yuan volatility. The industry is currently developing two parallel systems: a decentralized, market-driven ecosystem and a closed, sovereign digital currency model.

China's refusal to integrate forces the rest of the world to build independently, fostering a more diversified and institutionally supported market. Although stablecoins have proven they can survive without China's approval, achieving true global scale and interoperability between Eastern and Western payment systems remains difficult without integrating the world's largest trade economy.

(Source：CryptoSlate)