China has tightened its rules on yuan-backed stablecoin issuance, barring both domestic and offshore entities from issuing such a stablecoin without approval. This comes as U.S. Treasury Secretary Scott Bessent urged Congress to pass the CLARITY Act to enable the U.S. to maintain its crypto lead over other countries, including China.
China Tightens Crypto Rules As Besssent Urges CLARITY Act Passage
According to a Bloomberg report, China has barred domestic and offshore entities it controls from issuing digital tokens abroad without approval and has also banned the offshore issuance of yuan-backed stablecoins. The People’s Bank of China and seven other agencies cited risks to monetary sovereignty as the reason why firms and individuals may not issue these stablecoins without approval.
This comes as the country continues to crack down on crypto-related activities, even as the U.S. pushes for regulatory clarity to take the lead over China. Notably, U.S. Treasury Secretary Scott Bessent, during a Senate Banking Committee hearing, again urged Congress to pass the CLARITY Act.
He stated that it is impossible to proceed without passage of the crypto bill and that they must get it across the finish line. Notably, his statement comes just as the crypto bill’s progress continues to stall.
CoinGape reported earlier this week that crypto firms have proposed changes, including allowing community banks to hold stablecoin reserves or issue stablecoins through partnerships, to advance the bill. Meanwhile, Senator Cynthia Lummis also suggested the crypto bill remains on course, as Senate Majority Leader John Thune has pledged to schedule floor time for it later this spring.
On Whether China Is Working On Its Digital Assets
During the hearing, Bessent also addressed claims that China was developing digital assets to challenge the U.S. financial system. He noted rumors of Chinese digital assets backed by assets other than the Yuan, including gold.
The U.S. Treasury Secretary added that he wouldn’t be surprised if they are working on this, given their large sandbox in Hong Kong. Meanwhile, Bessent also noted that there are no plans to issue a Central Bank Digital Currency (CBDC), as some other countries have done, including China.
He suggested that the focus is on providing clarity through the GENIUS Act and CLARITY Act to boost crypto adoption in the private sector. “And I think the world is going to choose the US dollar and the private sector, a well-regulated choice that US stablecoins will provide,” Bessent added.
At the House hearing earlier this week, the U.S. Treasury Secretary reiterated plans to use confiscated BTC to build the Bitcoin reserve. This came amid a question about whether they could “bail out” BTC, which he said he doesn’t have the authority to compel banks to buy the leading crypto asset.
