China Backs Coordinated Stablecoin Supervision – Code-Level Compliance and Third-Party Audits

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 ￰1￱ Takeaways: Recommendations include third-party audits, real-time reserve verification, and code-level regulatory ￰2￱ concerns include scams targeting inexperienced users and the need for national-level financial literacy ￰3￱ has indicated interest in contributing to global frameworks for stablecoin governance beyond its own licensing ￰4￱ article was published in Study Times and written by Han Weili, associate dean at Fudan University’s School of ￰5￱ called stablecoins a fast-expanding financial tool facing urgent challenges in transparency, cross-border compliance, and user ￰6￱ a Global Regulatory Network “Stablecoins operate globally, but most regulatory systems remain domestic and isolated,” Han ￰7￱ article separates stablecoins into three categories: fiat-collateralized, on-chain-collateralized, and ￰8￱ model carries distinct technical and legal risks, especially when issuers are not subject to uniform licensing or reserve disclosure ￰9￱ stressed that trust in stablecoins comes from multiple layers: the peg mechanism, the verifiability of reserve assets, and enforceable ￰10￱ 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. @GoldmanSachs stablecoin market analysis projects massive expansion, with USDC set for $77B growth by 2027. #Stablecoins #Tether #USDC ￰0￱ — ￰11￱ (@cryptonews) August 20, 2025 The article called for establishing real-time reserve verification and audit frameworks, with third-party oversight to enforce consistency across ￰12￱ also proposed embedding regulatory constraints directly into smart contract code to ensure automated ￰13￱ and International Drawbacks of Stablecoins Domestically, the article raised concerns about scams targeting new users unfamiliar with digital ￰14￱ urged authorities to expand public education on digital finance and integrate stablecoin risks into national financial literacy ￰15￱ said global stablecoin supply could grow from hundreds of billions to several trillion dollars as use cases expand into payments, trade, and tokenized ￰16￱ 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 ￰17￱ countries have launched regulatory pilots, but no unified mechanism exists to track stablecoin flows across ￰18￱ common standards, national rules may remain fragmented and ￰19￱ a shared infrastructure, future coordination may require treating parts of the stablecoin system, such as reserve disclosures or contract ￰20￱ could prompt cross-border frameworks similar to those used in banking or trade compliance.