China tells brokers to halt endorsements of stablecoin, sources say

Audio By Carbonatix

(Reuters) -Chinese regulators have asked big local brokers to halt publication of research endorsing stablecoins in a bid to curb a surge in interest in the digital currency among domestic investors, two sources familiar with the matter said.

While crypto trading is banned in mainland China, brokerages have received a wave of requests for information on stablecoin and digital assets from Chinese investors since Hong Kong passed a stablecoin bill in May, sources at the brokerages say.

Some major brokerages received guidance from market regulators in late July and earlier this month pushing them to discontinue publishing research notes and making public comments on stablecoins, the sources said.

The People’s Bank of China said it had no immediate comment on the matter, while the China Securities Regulatory Commission did not immediately respond to a Reuters request for comment.

Bloomberg first reported the news. Some think-tanks have also received guidance from financial regulators that they should cancel stablecoin-related seminars, its report said.

Chinese policymakers have been more openly talking about stablecoins in the past few months, with PBOC governor Pan Gongsheng saying in June the boom in digital currencies and stablecoins poses huge challenges to financial regulation.

A Shanghai regulator held a meeting last month for local government officials to consider strategic responses to the rise of stablecoins and digital currency – a sign of a potential shift in tone from China over crypto assets.

But the post on the Shanghai State-owned Assets Supervision and Administration Commission’s official WeChat account giving details of the meeting is no longer available.

Stablecoins are a type of cryptocurrency designed to maintain a constant value. They are usually pegged to a fiat currency such as the U.S. dollar, and are commonly used by crypto traders to move funds between tokens.

(Reporting by Hong Kong and Shanghai newsroom, Ananya Palyekar in Bengaluru; Editing by Mrigank Dhaniwala and Jan Harvey)