Former People’s Bank of China Governor Zhou Xiaochuan has cautioned policymakers against embracing stablecoins, arguing that the digital tokens could fuel speculation and threaten financial stability. Speaking at a recent forum, Zhou said China’s existing retail payment infrastructure is already “highly efficient and low-cost,” offering limited room for stablecoins to deliver additional benefits. Zhou’s comments run counter to a growing chorus of economists and policy advisers who say stablecoins could help internationalise the yuan by smoothing cross-border transactions. Proponents contend that a yuan-backed stablecoin would make it easier for overseas businesses and investors to settle trade in the Chinese currency. The debate underscores Beijing’s broader dilemma over how quickly to open its financial system to privately issued digital assets while protecting the domestic banking sector. Although the central bank has been piloting its own digital yuan, officials remain wary of ceding ground to market-based tokens that could erode regulatory control.