China has introduced new limits on private digital money tools, which block companies from issuing stablecoins tied to the Renminbi and tokenized real-world assets.
The decision comes after the government allowed commercial banks to offer interest to users who hold the digital yuan, which is the state-backed central bank digital currency.
The People’s Bank of China and seven other regulators released the statement on February 6. The rule covers firms based in China and firms based abroad.
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The Ministry of Industry and Information Technology and China’s Securities Regulatory Commission also signed the notice.
The announcement said, “Stablecoins pegged to fiat currencies perform some of the functions of fiat currencies in disguise during circulation and use. No unit or individual at home or abroad may issue RMB-linked stablecoins without the consent of relevant departments”.
Winston Ma, an adjunct professor at New York University Law School and a former Managing Director at CIC, explained that the rule applies to every form of the Renminbi.
He noted that this includes CNY, the onshore currency, and CNH, the offshore version used in foreign markets. He said the restriction covers both to prevent RMB-linked stablecoins from forming a parallel system.
The UK’s House of Lords recently held a session to hear opinions on stablecoins as part of a new inquiry into how they should be managed under national rules. What did they say? Read the full story.
