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📍China's move to curb the development of stablecoins: It's not about crypto, but about anti-dollarization.
👉🏻Although Beijing has banned most crypto activities since 2021, OTC trading is still thriving and even accelerating. In the first 3 quarters of 2024, OTC trading in China reached ~$75B, with Q2/2024 hitting $23.7B, the highest level in 3 years.
✨This is concerning for Beijing as USD-pegged stablecoin flows into the economy, bringing along the risk of dollarization - something that China and BRICS are striving to combat.
✨Chinese authorities have requested that securities firms and academic organizations stop publishing materials and cancel seminars on stablecoins. This move is not only to clear the narrative supporting stablecoins, but also to prevent the possibility of USD-pegged tokens becoming an uncontrolled capital channel.
The OTC trading range mainly comes from amounts over $1M, stablecoins are playing a role as an underground bridge for cross-border payments, trade offsets, and even evading sanctions.