Can Stablecoins Thrive Without China?

China has again made its position on stablecoins unequivocally clear.

In a recent financial policy forumPan Gongsheng, governor of the People’s Bank of China (PBoC), described stablecoins as a “new source of vulnerability” in the global financial system. He warned that they could undermine the monetary sovereignty of smaller economies and allow illicit financial flows.

According to him, these assets “amplify the gaps in global financial regulation, such as money laundering, illegal transfers of cross-border funds and terrorist financing”. He also emphasized that most stablecoin projects fail to meet basic compliance standards such as customer identification and anti-money laundering controls.

His remarks reaffirm China’s decades-old position: private digital currencies and stablecoins remain off limits, even as Beijing continues to do so. advance your digital yuan (e-CNY) as a state-controlled alternative.

Still, as the rest of the world accelerates toward tokenized finance, China’s absence raises the pressing question of whether stablecoins can truly thrive without the world’s largest fintech economy.

A global market that moves without Beijing

For now, the answer seems to be yes.

As China doubles down on restrictions, global adoption of stablecoins is on the rise. According to DeFiLlama datathe total capitalization of the sector has recently crossed $ 308 billion, expanding by almost $ 100 billion since January.

At the same time, a report by A16z shows that the sector’s transaction volumes exceeded $46 trillion over the past year, rivaling established payment giants such as Visa when adjusted for legitimate activity.

Chris Dixon, a partner at venture capital firm A16z, he said: :

“Stablecoins have become mainstream. [They] they have found an adaptation to the product market, competing with the largest payment networks in the world in the volume of transactions”.

This stage is not surprising, considering that governments across Asia, which once echoed Beijing’s caution, are moving in the opposite direction.

Japan legalized fiat-backed stablecoins this year, with fintech firm JPYC Inc. which launched the first fully-fledged yen-denominated token. ethereum, Avalancheand Polygon.

In addition, other major jurisdictions, including South Korea, Hong Kong and Singapore, are the preparation of similar pictures to license issuers and protect consumers.

In the West, the United States is pushing toward formal oversight through legislation such as the GENIUS Act, while major institutions, from PayPal to Western Union, are developing their own tokenized settlement assets.

These moves transform stablecoins from speculative instruments into regulated infrastructure for payments, remittances and on-chain treasury management.

That momentum suggests the market can function and flourish without China’s involvement because the technology has matured beyond its early crypto-native roots.

Essentially, stablecoins now act as the liquidity core of decentralized finance and the backbone of on-chain trading, enabling instant settlement across thousands of platforms.

Prosperous without China: But not completely free from it

Yet even as the industry expands, China’s influence persists.

The Asian country’s market size, cross-border trading capacity and digital payment infrastructure remain unmatched. Platforms like Alipay and WeChat Pay process more transactions annually than several entire regions combined. Excluding that ecosystem limits stablecoins’ reach and potential scale.

In practice, the ban did not wipe out stablecoin activity in China. Instead, he just pushed her underground.

Chinese investors and companies still use dollar-pegged tokens as USDT through offshore exchanges and private OTC desks to move funds internationally or hedge against yuan volatility.

Despite official restrictions, stablecoins remain a quiet tool of capital mobility in Chinese networks.

This underground usage illustrates how the prosperous sector could benefit from the eventual inclusion of China in the technology.

A fully integrated Chinese presence, whether through regulated participation or interoperability between e-CNY and compliant stablecoins, would link the world’s largest trading economy to blockchain-based payments. This would undoubtedly fulfill the network effect that stablecoins currently lack.

For now, however, two parallel systems are emerging: an open, market-driven ecosystem driven by dollar-backed tokens, and a closed, sovereign digital currency model built around the e-CNY.

A necessary absence?

China’s decision to settle may, paradoxically, strengthen the case for decentralized finance and stablecoins.

By refusing to integrate, Beijing forces the rest of the world to build independently. As a result, this process has already created a more diversified, regulation-aware and institutionally supported market.

Stablecoins have become essential to global liquidity, powering decentralized exchanges, tokenized bond markets, and United States Treasury Instruments. Its growth has continued despite regulatory uncertainty, cyberattacks and central bank skepticism.

So each expansion strengthens its staying power and proves that the concept of a borderless digital dollar can survive without China’s approval.

However, the long-term picture remains nuanced.

Without China, stablecoins lose access to one of the largest pools of fintech innovation and global trade establishment. With this, they will be able to achieve true interoperability between Western and Eastern payment systems.

For now, the market is proving that thriving without China is possible.

However, thriving globally can be much more difficult because the absence of the world’s most significant digital economy limits scale.

However, the quiet participation of Chinese investors shows that even a strict policy cannot suppress the appeal of programmable money.