China is rethinking its stance on stablecoins, once seen as threats to financial sovereignty, amid growing concern over U.S. dollar-backed tokens cementing themselves in Asia’s financial infrastructure.
In 2021, the People’s Bank of China (PBOC) warned that global stablecoins could pose significant risks to the monetary system and cross-border capital flows. That skepticism was partly triggered by Facebook’s now-defunct Libra project. But in the years since, U.S. dollar-denominated stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) have taken root across Asia, streamlining payments and trade.
Today, those same tools are prompting a policy pivot in Beijing.
“Stablecoins are back on the table—not because they went away, but because they’ve gone mainstream,” said Evan Auyang, president of Animoca Group, a Hong Kong-based Web3 investment firm. “China is now accelerating its stablecoin agenda in response to U.S. pressure.”
GENIUS Act Spurs Urgency
Auyang cited the recent passage of the GENIUS Act in the U.S., which provides federal regulatory clarity for fiat-backed stablecoins. The law, he said, effectively strengthens the U.S. dollar’s digital foothold and is seen in Beijing as a strategic move that cannot go unanswered.
“When China sees the U.S. formalizing stablecoin rules, it interprets that as a signal to act quickly,” Auyang told CoinDesk. “It’s about competing with the global financial rails being built on top of blockchain.”
China Eyes Offshore Yuan Stablecoins
Animoca is part of a consortium—including Standard Chartered and Hong Kong Telecom—working on a Hong Kong dollar (HKD)-denominated stablecoin. But Beijing’s deeper interest, Auyang said, lies in creating offshore yuan (CNH) stablecoins that can be used for cross-border settlements without undermining domestic capital controls.
“If the goal is to internationalize the RMB in a controlled fashion, the CNH stablecoin is the answer,” he said.
Unlike China’s state-backed e-CNY, which is primarily designed for domestic or institutional use, CNH or HKD stablecoins issued on public blockchains could enable trade settlement while preserving monetary sovereignty.
From Opposition to Adoption
The PBOC’s 2021 white paper painted stablecoins as speculative and destabilizing. Four years later, the tone has shifted. Beijing now views regulated stablecoins as essential tools for participating in—and shaping—the future of global finance.
Liquidity pools in Hong Kong could soon support CNH, HKD, and e-CNY-based transactions, while also linking to tokenized Chinese assets, forming a new class of financial infrastructure aligned with China’s strategic interests.
Global Shift Underway
“This isn’t about displacing the dollar,” Auyang clarified. “It’s about ensuring that other currencies—particularly the RMB—have a credible digital presence in a world increasingly defined by tokenized finance.”
He believes every major economy will eventually issue regulated stablecoins following the GENIUS Act, marking a new era of currency competition and programmable money.
Market Snapshot
- BTC: Bitcoin is consolidating at $118,000 after peaking at $123,000 last week. Analysts caution of a short-term dip to $115,000 amid profit-taking, though long-term momentum remains intact.
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- Nikkei 225: Gained 1.09%, lifted by optimism over regional trade deals.
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