Former Chinese Central Bank Governor Warns of Risks from Stablecoins – Coincu

Lede: Former PBoC Governor Zhou Xiaochuan highlighted USD stablecoin risks at the 2025 Lujiazui Forum.

Zhou emphasized potential adverse economic effects from dollarization, sparking global discussions.

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At the Lujiazui Forum in Shanghai, Zhou Xiaochuan, former governor of the People’s Bank of China, spotlighted discussions around USD-pegged stablecoins. He highlighted their potential to facilitate dollarization, raising concerns about economic impacts.

The prominence of USD-pegged stablecoins may lead to increased dollarization in global economies. Zhou cautioned that unless countries face severe economic problems, dollarization could introduce significant negative side effects.

“The US dollar stablecoin may assist in dollarization, and the impact of dollarization on the economy is highly controversial.” — Zhou Xiaochuan, Former Governor, People’s Bank of China

Tether USDt Dominance Sparks Discussions on Global Implications

Did you know? The concept of dollarization refers to the use of the US dollar in a foreign country’s economy, which can lead to significant economic implications.

According to CoinMarketCap data, Tether USDt (USDT) maintains a stable price at $1.00, with a market cap of $155.60 billion and 4.77% market dominance. The 24-hour trading volume recorded a 7.66% decrease, marking it at $79.81 billion.

The Coincu research team suggests that if USD-pegged stablecoins continue expanding, it may lead to global financial realignments. They emphasize cautious monitoring of emerging markets considering digital currency issuance. Notably, the expansion of these stablecoins poses potential challenges similar to those highlighted by vulnerabilities in digital platforms.