China's digital finance push reshapes capital markets

China's accelerating drive of finance digitalization is shifting from technology-driven innovation to deepening institutional reforms, with digital assets expected to redefine the logic of capital market operations, said experts participating at a high-level forum in Beijing on Saturday.

The push — highlighted at a parallel session of the 2025 Tongzhou Global Development Forum — reflects the growing role of digitalization in advancing institutional reform and supporting high-quality development.

As the global capital market enters a new phase marked by integration and fragmentation, digitalization is emerging as a driving force reshaping the global financial landscape.

"China's capital market is entering a new stage driven by digitalization," said Zhu Xiaoneng, Party secretary of the School of Finance at Shanghai University of Finance and Economics. "Just as mobile payment has transformed people's lifestyles, digital assets and stablecoins will redefine the logic of capital market operations."

The remarks were made during the session, which focused on "The New Pattern of Global Capital Market Development — Opportunities, Challenges and Innovation Paths".

Zhu noted that as new quality productive forces spur financial innovation, the idea that "everything can be tokenized" is becoming a reality. Physical assets — from equities and bonds to gold — are being digitized to form an expanding pool of digital assets. "The tokenization of assets marks the starting point of digital investment, while stablecoins are the key to unlocking this new ecosystem," he said. "They inject vitality and liquidity into the digital financial world, serving as a bridge between innovation and trust."

He further explained that blockchain's transparency and immutability are reshaping the foundation of trust in modern finance — enhancing market transparency and widening investor participation. "Digital finance in the future will be defined not just by technology, but by institutions," he said. "A transparent, multi-layered and inclusive trust framework will be essential to the sustainable development of digital capital markets."

Representatives from the financial industry echoed the view. Xia Le, chief economist for Asia-Pacific at BBVA Research, said stablecoins are fast becoming influential players in global capital markets, but their growth must be anchored in robust oversight. "Stablecoins are neither truly decentralized nor inherently stable," Xia said. "Their credibility hinges on institutional design and regulatory discipline."

He highlighted that Hong Kong is uniquely positioned to lead in this area. Developing a Hong Kong dollar–denominated stablecoin, he said, would help expand the city's Web3.0 ecosystem and accelerate the digital transition of its financial sector. "As a bridge in the global financial system," Xia said, "Hong Kong can leverage stablecoins to enhance cross-border payment efficiency while balancing innovation with prudent risk management."

From academia to the financial sector, digital finance is becoming a powerful driver of institutional reform and market openness. Experts emphasized that the deep integration of digitalization and regulatory innovation is paving the way for a more coordinated and resilient phase of China's capital market opening.

"The core function of China's capital market is shifting from traditional financing to fostering innovation and wealth creation," said Wu Xiaoqiu, president of the National Academy of Financial Research. "Reforms across the asset, funding and institutional fronts will help advance institutional opening-up and better support China's innovation-driven growth."

Zhang Chenxu contributed to this story.