China is considering launching a "Renminbi stablecoin": focusing on cross-border payments and countering the dominance of the US dollar!

At a critical moment when the global financial system is undergoing a digital transformation, China seems to be brewing a well-thought-out chess game. After years of strict control over domestic Crypto Assets trading, recent reports from foreign media reveal that officials and policymakers are seriously considering a significant initiative that could reshape the global Digital Money landscape—approving or even promoting the issuance of stablecoins backed by the Renminbi. This move is not a comprehensive opening up to Crypto Assets but a strategically focused deployment with clear objectives, aiming directly at the increasingly expanding dominance of the U.S. dollar in the Digital Money sector, with its core application scenario targeting the vast cross-border trade Payment Network.

Internationalization of the Renminbi

Reuters quoted sources as saying that amid the growing influence of the US dollar stablecoin, China sees "financial innovation," particularly "stablecoins," as an opportunity to promote the internationalization of the renminbi. The Chinese State Council is expected to review and possibly approve a roadmap for "promoting the internationalization of the renminbi" by the end of the month, which will cover goals for increasing the use of the renminbi in global markets, the division of responsibilities among various regulatory agencies, and corresponding risk control guidelines.

Sources further indicated that Chinese officials are expected to hold a special study meeting at the end of this month, focusing on "Renminbi internationalization" and "stablecoins." During this meeting, leaders may deliver speeches to set the tone for the commercial application scope and development direction of stablecoins. Relevant details are expected to be announced within weeks, with specific responsibilities assigned to institutions such as the People's Bank of China (PBOC), while Hong Kong and Shanghai have been named as the initial pilot areas for implementation.

Just last month, the Shanghai financial regulatory authority held a meeting with local officials to discuss strategies for responding to stablecoins and digital money. Recently, People's Bank of China advisor Huang Yiping stated in an interview that it is not impossible to issue "offshore RMB stablecoins" in Hong Kong in the future. It is worth noting that the Hong Kong "Stablecoin Regulation" officially came into effect on August 1, becoming the first market in the world to establish regulatory standards for stablecoin issuers, which also gives China's strategic blueprint more operational space.

Digital Dollar Monopoly

To understand the profound implications of this potential policy shift, it is essential to recognize the harsh reality of the current global stablecoin market. According to statistics, the total market value of stablecoins in circulation worldwide has reached hundreds of billions of dollars, with as much as 99% of the share accounted for by stablecoins pegged to the US dollar (such as USDT and USDC). This astonishing data implies that in the emerging payment and settlement networks constructed by Web 3.0 and blockchain, the US dollar has almost replicated or even reinforced its hegemonic position in the traditional financial world.

For China, this is a strategic warning that cannot be ignored. The trend of "digital dollarization" not only poses a threat to the diversification of the global financial system but also directly challenges the long-term goal of the internationalization of the Renminbi. In a future global trade system based on blockchain as the underlying infrastructure, if the pricing and settlement of transactions still completely rely on USD stablecoins, then even if the trading partners are not the United States, all transactions will still be unable to escape the gravitational pull of the dollar and may be indirectly subject to U.S. financial regulation and policy trends. Therefore, breaking this monopoly and establishing a separate, efficient digital value circulation channel centered on the Renminbi has become an urgent strategic task.

Contrary to the widespread speculation outside, the design intention of the RMB stablecoin that China is considering this time is not to meet the domestic retail payment needs—this function has already been undertaken by the central bank digital currency (e-CNY). On the contrary, its strategic focus is entirely on the vast international market, especially the core area of cross-border trade payments.

According to the information disclosed by various parties, one of the most likely implementation paths is to use Hong Kong as a pilot to launch a stablecoin backed by offshore Renminbi (CNH).

The advantages of choosing Hong Kong as a "testing ground" are obvious. First, Hong Kong, as a leading global international financial center and the largest offshore Renminbi hub, has a mature financial infrastructure and regulatory environment. Secondly, the virtual asset regulatory sandbox that Hong Kong has actively built in recent years provides the perfect soil for the birth and testing of compliant stablecoins.

By issuing offshore RMB stablecoins in Hong Kong, a multifaceted strategic goal can be achieved: Serving the real economy: Providing countries along the "Belt and Road" and other trading partners with a payment settlement option that is faster, cheaper, and operates 24/7 compared to the traditional SWIFT system. This will greatly enhance the convenience and attractiveness of using the Renminbi in international trade. Avoiding domestic risks: By issuing and circulating in the offshore market, it can effectively avoid impacts on capital controls and monetary policy in mainland China, achieving global promotion under "risk isolation". Establishing an alternative payment network: In the long run, a successful and widely adopted Renminbi stablecoin payment network will provide the world with a reliable international payment option beyond the US dollar, which is of great significance for enhancing the resilience and diversity of the global financial system.

Global Market Opportunities

Once China officially enters the stablecoin market, it will undoubtedly have a profound impact on the global finance and crypto markets. A stablecoin backed by the credit of the world's second-largest economy will provide unprecedented choices for the market and is very likely to trigger a reallocation of global capital and users. For the crypto market itself, this could become a powerful catalyst for igniting the next bull market. The emergence of a renminbi stablecoin will inject massive liquidity, new application scenarios, and hundreds of millions of potential users into the crypto world, especially in regions closely trading with China, such as Asia, Africa, and Latin America.

It is worth noting that while China is brewing this move, U.S. regulators, especially the U.S. Treasury, are intensifying scrutiny on existing dollar stablecoin giants Tether and Circle. This regulatory pressure from the U.S. may also create a subtle time window for the rise of the renminbi stablecoin.

Geopolitical Financial Game

In summary, China's consideration of launching a renminbi stablecoin is by no means a simple innovation in technology or financial products, but rather a well-considered geopolitical financial strategic game in the context of the global economic digital transformation. It runs parallel to e-CNY, which aims to serve domestic payments, and they complement each other, together forming the "dual pillars" of the digital renminbi strategy.

By focusing on the实体经济需求 of cross-border trade payments and cleverly leveraging Hong Kong's "one country, two systems" advantage, China is attempting to open up a brand new digital path for the internationalization of the renminbi without disturbing the domestic financial order. This is not only a direct response to the extension of dollar hegemony in the digital realm but also a key step towards building a more diverse and balanced global digital money system. The global competition surrounding stablecoins is likely just beginning to show its far-reaching impact.