Latest news with #financialauthorities
South China Morning Post
14-07-2025
- Business
- South China Morning Post
Stablecoin scams, innovation put China's financial regulators in high-stakes balancing act
A financial dilemma has sent local-level financial authorities across China scrambling as they try to navigate a stablecoin frenzy that some say has become a breeding ground for chaos, with scams that have already duped millions. As a result, several local governments have elevated stablecoins to the top of their agendas in recent weeks while issuing urgent warnings to investors about illegal fundraising and fraudulent schemes. With this in mind, the nation's top financial authorities remain committed to financial innovation and adaptation. And regulators are doing their best to strike a balance. But in major mainland cities such as Beijing, Shenzhen, Suzhou and Chongqing, alerts went out last week. They warned that illicit financial activities, which often lure investors with promises of high returns and guaranteed interest payments, pose significant risks to public financial security. The word of caution came as a major investment scam – promoting high returns using buzzwords and terms such as 'USDT', a leading stablecoin also known as tether – was being widely reported across the mainland. Said to have defrauded more than 2 million investors, the scheme has evoked memories of widespread collapses among peer-to-peer lending platforms in China between 2018 and 2020. Thus, the dangerous financial ploy has reignited concerns about regulatory challenges in managing emerging financial technologies (fintech) in a Chinese-style market economy, and the market remains wary of what is widely perceived as a recurring flaw, with 'lax regulation leading to chaos, followed by crackdowns that cause collapse'.
Bloomberg
11-07-2025
- Business
- Bloomberg
Stablecoin Growth Presents New Risks for Regulators, BIS Says
The Bank for International Settlements warned that the rapid expansion of stablecoins — digital tokens usually pegged to fiat currencies — is creating new policy challenges for financial authorities, potentially placing monetary sovereignty in key markets under threat. Growth in both circulation and integration with traditional finance warrant closer regulatory scrutiny, the BIS said in a bulletin on Friday. It cited a doubling in stablecoins' overall market value to about $255 billion since 2023, with more than 90% of that value concentrated in two US dollar-pegged tokens.
