China is accelerating its exploration of stablecoins to challenge U.S. dollar dominance, though capital controls restrict the initiative to Hong Kong’s offshore renminbi market, where liquidity is limited.
Dr. Vera Yuen of Hong Kong University’s Business School told CoinDesk that the move is strategic. “CBDCs are primarily designed for domestic use. Stablecoins, however, are better suited for cross-border transactions because they offer interoperability and international utility,” she said.
The push follows the U.S. GENIUS Act, which established a regulatory framework for dollar-pegged stablecoins, pressuring China to act faster. Evan Auyang, president of Animoca Group, said Beijing now views stablecoins as critical infrastructure for global trade and settlement, rather than speculative assets.
While the e-CNY remains China’s domestic digital currency of choice, stablecoins are positioned to facilitate international use. Offshore issuance will start in Hong Kong, though thin CNH liquidity limits wider adoption.
Across Asia, Japan is developing yen-backed stablecoins for domestic circulation, with firms such as Monex, SBI, and JPYC leading the effort, reflecting a regional push to compete with U.S. dollar tokens.
China’s stablecoin strategy appears designed to complement the e-CNY, expanding the yuan abroad while maintaining domestic control.
Market Snapshot
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