Shanghai SASAC Meeting Hints at Possible Policy Shift on Cryptocurrency

In a significant policy development, the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) convened a meeting on July 10, 2025, to deliberate on strategic responses to stablecoins and digital currencies. Attended by approximately 60 to 70 officials, this gathering signals a potential shift in China's stringent stance on cryptocurrencies, which have been banned since 2021.

During the meeting, SASAC Director He Qing emphasized the necessity for heightened awareness of emerging technologies and enhanced research into digital currencies. The agenda encompassed discussions on the history, types, and global regulatory strategies concerning cryptocurrencies and stablecoins, culminating in policy suggestions tailored for China's context.

This development aligns with a growing domestic interest in developing a yuan-pegged stablecoin. Chinese companies, including JD.com and Ant Group, are advocating for such initiatives and plan to apply for stablecoin licenses in Hong Kong, where new legislation is set to take effect on August 1, 2025.

China's relationship with cryptocurrencies has been marked by a series of regulatory actions. In 2017, the People's Bank of China (PBOC) banned initial coin offerings (ICOs) and shut down domestic cryptocurrency exchanges, citing concerns over financial stability and capital flight. In May 2021, the government intensified its crackdown by prohibiting financial institutions and payment companies from providing services related to cryptocurrency transactions. By September 2021, the PBOC declared all cryptocurrency transactions illegal, effectively banning the use of digital currencies nationwide.

Despite these bans, reports indicate that Chinese investors realized gains of approximately $1.15 billion in 2023 from cryptocurrency investments, underscoring persistent domestic interest.

Hong Kong has been positioning itself as a global cryptocurrency hub. In December 2023, the city launched its first spot cryptocurrency exchange-traded funds (ETFs), aiming to attract investors and compete with other financial centers. However, the region has also faced challenges, such as the JPEX exchange incident in 2023, which led to regulatory scrutiny and a reassessment of digital asset regulations.

The outcomes of the Shanghai meeting suggest a potential softening of China's stance on digital currencies, indicating a willingness to explore regulatory frameworks that could accommodate stablecoins and other digital assets. This shift may be influenced by the global momentum towards digital currencies and the desire to maintain competitiveness in the financial sector.

As China continues to navigate the complexities of digital currency regulation, the actions taken by SASAC and other regulatory bodies will be closely watched by both domestic and international stakeholders.