• Regulations & Compliance
  • Institutional Adoption

China Signals Crypto Comeback Starting with Stablecoins and RWAs

8/4/2025
3min read
Denislav Manolov's Image
by Denislav Manolov
Crypto Expert at Airdrops.com
8/4/2025
3min read
Denislav Manolov's Image
by Denislav Manolov
Crypto Expert

China Eyes a Crypto Return—But with Guardrails

Dr. Xiao Feng, the widely respected CEO of HashKey Group and often dubbed “The Father of China’s Blockchain,” says China is preparing for a strategic re-engagement with crypto, beginning with stablecoins and followed by Real World Assets (RWA). In a candid interview with blockchain expert Liu Feng, Dr. Xiao emphasized that this shift is driven not by market hype, but by the pressures of global monetary competition.

According to Xiao, “Mainland China is beginning to re-engage with the crypto world. This process would start with stablecoins.”

That’s a sharp contrast to the region’s previous clampdown on crypto activities. The renewed focus, he said, marks a pragmatic acknowledgment of how blockchain can reshape global finance—not just through payments, but by redefining accounting infrastructure itself.

Stablecoins: Not Just Payments—But Infrastructure

While stablecoins are often seen as tools for payment, Dr. Xiao insists their true value lies elsewhere.

“People misunderstand the core purpose of stablecoins,” he said. “They were created primarily as a trading medium for volatile crypto assets.”

He argues that stablecoins represent the foundation for a more efficient financial market, capable of real-time settlement and peer-to-peer transactions with lower friction. According to Xiao, “Blockchain is more than just tokens. It’s a new method for accounting.” This vision elevates stablecoins from speculative assets to core infrastructure in the global monetary system.

The market excitement, especially in Hong Kong, contrasts sharply with the conservative stance of its regulators, who are focused on AML compliance and reputation protection. Still, Dr. Xiao believes Hong Kong could play a vital role in shaping this next evolution.

AML, Transparency, and the Future of Stablecoin Regulation

One of Xiao’s boldest claims is that crypto may offer better AML tools than traditional finance. “We can trace all transactions on-chain,” he said, highlighting the transparency and auditability of blockchain. He warned, however, that stablecoins on permissioned or consortium chains will fail—because permissionless public chains are essential for broad adoption and market trust.

As regulators tighten rules worldwide, Dr. Xiao contends that compliance doesn’t kill innovation—it unlocks it. With AML tools baked into blockchain protocols, digital assets can operate under transparent and effective governance.

Real World Assets and the Shift to Digital Twins

Dr. Xiao sees the next phase as a move from digital-native to digital-twin assets—tokenized versions of real-world assets like bonds, real estate, and equities. This transformation requires onshore, regulated exchanges, not the old offshore models. “The market is undergoing a profound transformation,” he explained. Regulated players will tap into what he estimates to be a multi-trillion-dollar opportunity.

He views Hong Kong as the perfect launchpad. “Hong Kong’s destiny is to be the Wall Street of Asia,” he declared. “Singapore is the Switzerland of Asia. Their strategies are completely different.” While Singapore takes a cautious, neutrality-driven approach, Hong Kong can position itself as the central node in Asia’s digital finance race.

Finding the Balance: Open Protocols, Centralized Apps

In closing, Dr. Xiao articulated a vision for layered crypto architecture

“We need decentralization for fairness and openness. We need centralization for efficiency and consumer protection at the application level.“

It’s a nuanced stance: open, public base layers like Ethereum or Bitcoin, but centralized platforms for user-facing services. This hybrid model, he argues, will define the future of regulated, global-scale digital finance.

Share with your friends on social media:

Join the community and don't miss a crypto giveaway.

Subscribe for updates by e-mail with the latest research reviews, airdrop news, reward programs, event updates about upcoming airdrops.

By entering your email address you are accepting our Terms & Conditions and Privacy & Cookie Policy.