The People’s Bank of China said it will step in if the overnight money market rate stays persistently away from its operating rates, underscoring its intent to keep short-term funding conditions broadly aligned with policy settings. The central bank also said it will adjust the timing of temporary overnight reverse repurchase agreements and outright repurchase agreement operations to 3:00 p.m. to 3:30 p.m., aiming to improve flexibility and execution in open market operations.
Under the new framework, the operating rates for temporary overnight reverse repos and outright repurchase agreements will be set 25 basis points below and above the seven-day reverse repo rate, respectively. Officials indicated that intervention will be triggered if the overnight money market rate remains consistently below or above those levels, suggesting a more active mechanism for managing liquidity conditions at the short end of the curve.
The central bank also outlined measures to broaden the use of yuan liquidity facilities for overseas official institutions. Through the FIMA RMB repo facility, eligible foreign central bank-type institutions will be able to access yuan funding against high-quality yuan-denominated collateral. Acceptable assets will include top-tier yuan bonds, among them Chinese government bonds. The move is designed to support cross-border yuan usage and improve the currency’s availability in offshore markets.
In a further sign of China’s effort to deepen international use of the yuan, the authorities said they will issue an action plan to develop offshore finance within the Shanghai International Financial Center. The plan is expected to expand the currency’s role in offshore business activities and strengthen Shanghai’s position as a financial hub.
The central bank also said Shanghai will study the feasibility of establishing offshore banks, pointing to a broader policy push to build infrastructure that can support yuan internationalization. Together, the measures suggest Beijing is seeking to reinforce monetary control at home while advancing the yuan’s global footprint through new offshore channels.A bipartisan group of US senators is pressing the Treasury Department to preserve a meaningful role for state authorities as it prepares rules to carry out the GENIUS Act, the federal framework for stablecoins. Led by Republican Senator Cynthia Lummis, the lawmakers said the department should implement the law in a way that keeps state participation intact rather than shifting oversight exclusively to Washington.
In a letter sent Tuesday to Treasury Secretary Scott Bessent, the senators focused on a provision that allows certain stablecoin issuers to be supervised by state regulators if their home state has a regime that is substantially similar to the federal standard. Under the statute, issuers with stablecoins valued at $10 billion or less may remain under state oversight. Based on current market values, nearly all stablecoins would qualify for that treatment, with only a small number above the threshold.
The lawmakers argued that Congress intended to preserve the dual banking system and protect the long-standing role of state banking agencies in supervising financial firms. They also said the Treasury’s preliminary proposal left important questions unanswered, particularly around the timing and process for state certification. In their view, the lack of detail could create uncertainty for states and be interpreted as limiting certification to a single initial window.
The senators said state legislatures operate on different schedules and should be allowed to develop regulatory regimes when local demand justifies it. They urged the Treasury to adopt a flexible framework that lets states seek certification as their laws are enacted, rather than forcing them to act within a narrow deadline.
The letter was signed by both Republicans and Democrats, including Senators Bill Hagerty, Kevin Cramer, Pete Ricketts, Kirsten Gillibrand, Angela Alsobrooks and Catherine Cortez Masto. Public comments on the Treasury’s proposal closed on June 2, and the department is now expected to prepare a final rule for publication.
