The Rise of Stablecoins: Regulatory Dilemmas and Future Solutions

Recently, the concept of "stablecoin" has suddenly become popular. As a lawyer who has been engaged in blockchain legal services for a long time, I deeply feel that this field is undergoing significant changes.

Recently, several news stories have attracted attention: the Shanghai State-owned Assets Supervision and Administration Commission is studying the development trend of stablecoins, the Shanghai Pudong Court is handling a major case involving 6.5 billion yuan in cross-border currency exchange, the U.S. President has signed a stablecoin regulatory bill, and Hong Kong is about to implement stablecoin regulatory regulations. These events reflect the different attitudes of various countries towards stablecoins.

The reason why stablecoins are favored by black and gray industries is that they break through many of the limitations of traditional currency exchange. They ignore quota limits, reduce pressure on capital pools, achieve fast transactions, possess strong anonymity, and can take advantage of differences in jurisdiction. These characteristics greatly enhance the efficiency of illegal currency exchange.

China has maintained a high-pressure stance against virtual currency crimes, mainly based on two considerations: first, the anonymity of virtual currencies can easily be used for money laundering; second, their cross-border characteristics may evade foreign exchange controls, affecting macroeconomic regulation. However, despite the increasing crackdown, stablecoins are becoming increasingly active in the gray market.

In fact, it is difficult to completely eliminate stablecoins through policy suppression. From the numerous cases I have handled, it is often only possible to catch peripheral figures, while the main perpetrators are hard to track down, and the losses to the country are difficult to recover. This fragmented approach to enforcement addresses the symptoms rather than the root cause, and instead consumes a large amount of law enforcement resources.

Unfortunately, China used to be a major player in the global stablecoin market, but due to policy restrictions, many projects were forced to go overseas. We missed the opportunity to dominate the stablecoin ecosystem. Although there have been attempts to promote the digital yuan, market acceptance is still relatively low.

From a technical perspective, a stablecoin is a blockchain-based programmable asset that is pegged to a fiat currency. It has wide applications in areas such as cross-border trade settlements, supply chain finance, and the digital asset market. We should recognize its value and consider how to utilize it in a controlled manner.

Stablecoins themselves are not tools for crime; the key lies in whether the system can keep up in a timely manner. The current regulatory vacuum has led to enforcement dilemmas: law enforcement personnel have insufficient understanding of blockchain, and the crackdown strategies are fragmented. In the future, it is necessary to build a regulatory system that balances safety and efficiency, allowing stablecoins to play a positive role.