Wang Yongli, former Vice President of the Bank of China, advocates for comprehensive crypto asset legislation in China, urging a focus on Real World Assets and bank integration.

Executive Summary

Wang Yongli, former Vice President of the Bank of China, has urged accelerated and comprehensive crypto asset legislation in China. His proposals prioritize encouraging financial institutions to adopt on-chain technologies, promoting Real World Assets (RWA), and attracting crypto exchanges, rather than focusing solely on RMB stablecoins. This strategic shift could fundamentally alter China's approach to crypto, potentially leading to significant institutional inflows and a more integrated traditional finance and crypto ecosystem.

The Event in Detail

Wang Yongli proposes several key initiatives for China's digital asset strategy. He advocates for expediting comprehensive crypto asset legislation, arguing that it should encompass more than just stablecoins. A central tenet of his recommendation is to encourage banks and other financial institutions to accelerate their integration with on-chain technologies and actively promote the development of Real World Assets (RWA). This would involve supporting customers in directly converting off-chain fiat currency deposits into on-chain tokens and vice-versa, bypassing intermediaries.

Furthermore, Wang suggests attracting crypto exchanges to register or operate in Hong Kong and accelerating the on-chain operation of the Renminbi. He believes that robust stablecoin legislation will serve as a catalyst for broader crypto asset legislation, fostering direct bank-to-public-chain connections for fiat-to-crypto conversion. This perspective suggests a departure from the traditional focus on a digital yuan stablecoin, which Wang views as having limited potential compared to the broader integration of crypto assets with mainstream finance. Reports indicate that Shanghai regulators have also held meetings to consider strategic responses to stablecoins and digital currencies, signaling a potential shift in tone within China regarding crypto policy.

Market Implications

The proposed legislative framework could facilitate widespread participation by banks and financial institutions, significantly reducing the additional steps and costs associated with fiat currency and stablecoin conversions. This shift is anticipated to accelerate the conversion of traditional financial products into Real World Assets (RWAs) and attract substantial participation from licensed institutions in crypto asset trading and exchange operations. Such developments could offer an alternative to central bank digital currencies (CBDCs) by providing a direct link between traditional finance and public blockchains.

Globally, the market value of US dollar stablecoins exceeded US$250 billion by June 2025, underscoring the scale of this segment. Should China adopt a similar legislative approach, it could drive extensive on-chain trading of standardized financial assets via RWAs, fostering the growth of the crypto ecosystem. However, potential restrictions on mainland-linked firms in Hong Kong's stablecoin market under new regulations could impact market participation, potentially limiting the immediate scale of Hong Kong's stablecoin ecosystem to foreign fintech firms, local startups, and international exchanges.

Expert Commentary

Wang Yongli argues that establishing the legality of fiat-backed stablecoins and other crypto assets will drive significant involvement from banks and financial institutions. He views the acceleration of the crypto ecosystem's growth, driven by the transition of standardized financial assets onto blockchain platforms, as an irreversible trend, and highlights the U.S. stablecoin legislation as a significant contribution in this regard.

Kevin Rusher, founder of RAAC, emphasizes the importance of institutional finance integration, stablecoin adoption, and the on-chain transition of stable assets like real estate and gold for the future of digital assets, stating, > "Instead of celebrity tokens, what truly matters for the future of digital assets is integration with institutional finance, the adoption of stablecoins, and the transition of stable assets like real estate and gold on-chain. This is what will help crypto break out of its yo-yoing cycles."

Broader Context

China's potential shift in crypto policy aligns with global movements toward regulated digital assets. The United States' GENIUS Act, signed into law in July 2025, established a clear legal category for fiat-backed digital assets, permitting issuance by insured depository institutions and non-bank fintechs with 1:1 USD backing. Similarly, Hong Kong's stablecoin licensing regime, effective August 1, 2025, requires regulatory approval for stablecoin issuers and mandates capital reserve requirements.

Hong Kong's HKD Stablecoin initiative aims to link with the digital yuan (e-CNY), offering a potential gateway for the yuan to extend its influence in global markets and reduce reliance on the US dollar. This aligns with Beijing's broader strategy to strengthen the yuan's role globally. However, despite Hong Kong's efforts to be a crypto-friendly hub, restrictions are reportedly placed on Chinese state-owned enterprises and firms with mainland ties from participating in Hong Kong's stablecoin market, reflecting Beijing's ongoing concerns about capital flight and illicit financial activity associated with cryptocurrencies. This creates a regulatory balancing act for Hong Kong, aiming to attract global players while aligning with mainland policies.