The growth of stablecoins issued mainly in the United States has raised concerns in China, where experts and authorities warn of risks to national monetary sovereignty. Simultaneously, the Asia-Pacific region is witnessing a surge in cryptocurrency-related cybercriminal activities, prompting Japan to call on the G7 to coordinate actions against the North Korean group Lazarus Group. This analysis details the economic, regulatory, and security implications for the global crypto ecosystem.

Regional Context: Impact on Tourism and Rising Cyber Threats

The Asia-Pacific region faces economic and digital security challenges. In Thailand, the arrival of Chinese tourists fell by 44% after a scandal linked to cryptocurrency scams, reflecting growing distrust in certain crypto services. At the same time, Japan has raised the urgent need within the G7 to confront North Korean hacker groups, particularly Lazarus Group, known for their attacks on cryptocurrency exchanges.

Stablecoins and Their Impact on China’s Monetary Sovereignty

A recent report by the China Economic Times, supported by the Development Research Center of the State Council, warns that the rise of stablecoins — cryptocurrencies pegged to stable assets like the U.S. dollar — poses a risk to China's control over its financial system.

The main concerns include:

• Erosion of sovereign credit systems: The circulation of digital assets tied to foreign currencies may reduce domestic demand for the yuan.
• Challenges to global financial governance: Stablecoins issued and regulated outside China undermine traditional international financial control structures.
• Transformation of the concept of money: Redefining money and its economic function could impact long-term financial stability.

Decentralized Cryptocurrencies: Bitcoin, Ethereum, and Their Regulatory Challenges

In addition to stablecoins, the expansion of Bitcoin and Ethereum introduces regulatory complexities for China. These decentralized cryptocurrencies operate without state control, making it difficult to apply traditional policy frameworks.

Ethereum-based platforms, which support smart contracts and financial transactions, increase the sophistication of the ecosystem, complicating government oversight. While these currencies are viewed with skepticism due to their volatility and use in opaque operations, dollar-backed stablecoins are seen as a direct threat to China’s national currency and monetary policy.

Regulatory Measures and Government Strategies

China has imposed strict restrictions, including a ban on cryptocurrency mining and limitations on exchange platforms. However, the international circulation of stablecoins escapes its control, generating concern.

In response, China has promoted the development of the digital yuan (e-CNY), a central bank digital currency (CBDC) designed to offer a sovereign alternative and maintain dominance over the internal financial system.

Meanwhile, Japan’s request for the G7 to confront North Korean hackers highlights the importance of international cooperation to prevent the illicit use of cryptocurrencies in activities such as money laundering and cyberattacks.

Conclusion

The rise of U.S. stablecoins represents a significant challenge to China's monetary sovereignty and raises questions about the future of global financial governance. The consolidation of the dollar through digital assets is redefining economic and political dynamics.

At the same time, the Asia-Pacific region must address growing risks from illicit activities within the crypto ecosystem, prompting calls for joint international action.

For cryptocurrencies like Bitcoin and Ethereum, this context implies greater regulatory challenges, where technological innovation must be balanced with financial stability and digital security.

In summary, the evolution of cryptocurrencies and stablecoins not only impacts financial markets but also reshapes economic power and security in an interconnected world.