China’s largest government-backed research funder has begun accepting applications for the study of stablecoins and their cross-border monitoring systems, a move indicating Beijing’s growing interest—and wariness—towards the emerging digital asset, reports the South China Morning Post. In a circular posted on its website last week, the National Natural Science Foundation of China—an affiliate of the Ministry of Science and Technology that manages hundreds of billions of yuan in annual funding—solicited proposals for the project, which it characterised as addressing an issue critical to the country’s economic development.
“The hidden circulation of private stablecoins can undermine the effectiveness of capital controls, and [presents] a latent challenge to the yuan with the expansion of US dollar-pegged stablecoins,” it said.
The foundation will provide grants of RMB 200,000 to RMB 300,000 ($28,042 to $42,063) for the research, and requested winners to “provide policy suggestions on how China should handle challenges brought by global stablecoins and contribute to digital finance governance”.