Recently, Zhou Xiaochuan, the former governor of the People's Bank of China, expressed in-depth insights on the issue of stablecoins, elaborating on the deep-seated contradictions faced by stablecoins from multiple perspectives.

Zhou Xiaochuan first pointed out the inherent risks of stablecoins. He believes that issuers of stablecoins often lack the public responsibility awareness of monetary policy like that of central banks, which may lead to over-issuance of stablecoins or uncontrolled reserve management. In addition, there are significant compliance gaps in stablecoins, especially since their 'soft wallet' model is difficult to meet regulatory requirements for anti-money laundering and user identity verification.

Regarding the actual demand for stablecoins, Zhou Xiaochuan raised doubts. He noted that in Asian countries, account-based payment systems, such as central bank digital currencies and QR code payments, have enabled efficient and low-cost payments. In such a situation, the full implementation of tokenized payments may lack a necessity. While the 'unified ledger' proposed by the Bank for International Settlements (BIS) attempts to strike a balance between traditional and tokenized payments, Zhou believes that not all financial assets are suitable for tokenization.

In terms of regulation, Zhou Xiaochuan emphasized several key points. First, it is important to strictly distinguish between the commercial profit motives of stablecoins and the public attributes of payment infrastructure. Second, there is a need to clearly define the boundaries between market-oriented services and public functions. Finally, he called for strengthening regulation against market manipulation, particularly to protect minor investors from harm.

Zhou Xiaochuan's views provide us with valuable insights for understanding and addressing the challenges posed by stablecoins. With the rapid development of the digital economy, finding a balance between innovation and risk control will be an important issue that regulators and market participants will face together.