Former PBoC Governor of China warns of risks from stablecoins

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According to Bloomberg, Mr. Zhou Xiaochuan, the former Governor of the People's Bank of China, warned in a closed-door meeting in mid-July that stablecoins could fuel speculation and cause financial instability. He stated that stablecoins do not have many cost advantages compared to China's existing retail payment system, while also noting that claims of the "extremely high" costs of traditional cross-border payments may be exaggerated.

Zhou also noted that the legal frameworks in the US, Hong Kong, and Singapore have yet to fully ensure that stablecoins are "fully backed by liquid assets," emphasizing the need to be cautious of the risk that they may be overused in speculative asset trading, leading to fraud and systemic risk.

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