A Chinese government-backed article has urged greater international coordination on stablecoin regulation, warning that fragmented oversight is failing to keep up with rising global adoption.
Key Takeaways:
The article was published in Study Times and written by Han Weili, associate dean at Fudan University’s School of Software. Han called stablecoins a fast-expanding financial tool facing urgent challenges in transparency, cross-border compliance, and user protection.
“Stablecoins operate globally, but most regulatory systems remain domestic and isolated,” Han wrote.
The article separates stablecoins into three categories: fiat-collateralized, on-chain-collateralized, and algorithmic. Each model carries distinct technical and legal risks, especially when issuers are not subject to uniform licensing or reserve disclosure rules.
Han stressed that trust in stablecoins comes from multiple layers: the peg mechanism, the verifiability of reserve assets, and enforceable regulation. While blockchain infrastructure allows transparent transactions and auditable smart contracts, he said, this is not enough to ensure accountability.
“Technology enables visibility, but legal and institutional safeguards determine credibility,” he wrote.
The article called for establishing real-time reserve verification and audit frameworks, with third-party oversight to enforce consistency across jurisdictions. Han also proposed embedding regulatory constraints directly into smart contract code to ensure automated compliance.
Domestically, the article raised concerns about scams targeting new users unfamiliar with digital assets. It urged authorities to expand public education on digital finance and integrate stablecoin risks into national financial literacy programs.
Han said global stablecoin supply could grow from hundreds of billions to several trillion dollars as use cases expand into payments, trade, and tokenized assets. Without coordinated rules and shared infrastructure, regulators may face persistent blind spots.
“Only through joint supervision and system-level alignment can stablecoins develop in a way that supports both innovation and security,” he wrote.
