China is facing increasing calls from leading economists and government advisers to explore the adoption of stablecoins for cross-border payments. This push gains momentum amid active US efforts to reinforce the dollar’s dominance through emerging digital technologies, reports Baltimore Chronicle with reference to Bloomberg.
Although Beijing has not yet formally recognized stablecoins — digital tokens pegged to traditional currencies — and maintains a comprehensive ban on most cryptocurrency activities, recent statements by senior officials from the People’s Bank of China have revitalized discussions on their potential use in international payment systems.
People’s Bank of China Governor Pan Gongsheng said in June that stablecoins could fundamentally transform international finance. He emphasized that rising geopolitical tensions expose the vulnerability of traditional payment mechanisms, which can be politicized and used as tools for sanctions.
At the same Shanghai conference, former central bank chief Zhou Xiaochuan noted that dollar-linked stablecoins could accelerate dollarization. Meanwhile, financial officials from mainland China and Hong Kong discussed the prospects of yuan-based stablecoins to support China’s ongoing efforts to promote its currency globally.
Despite Beijing’s historically cautious stance towards cryptocurrencies—viewing them as threats to financial stability and capital control—economists now see new opportunities, partly fueled by increasing US government support for digital assets.
Morgan Stanley suggests Hong Kong could serve as a pilot zone for offshore yuan-based stablecoins, allowing Beijing to bypass strict capital controls on the mainland. Robin Xing, chief China economist at Morgan Stanley, stated that stablecoins are not new currencies but new distribution channels for existing ones. He stressed the importance for China to join the global trend of sovereign currency tokenization to maintain competitiveness in the digital infrastructure race.
These remarks by Chinese officials came just hours before the US Senate passed a bill regulating stablecoins, marking a significant victory for the crypto industry and reinforcing President Donald Trump’s digital asset agenda.
US Treasury Secretary Scott Bessent said on June 19 via a post on X that stablecoins could strengthen — rather than threaten — the dollar’s global dominance. Speaking to Bloomberg TV, Bessent added that worldwide users are likely to prefer US-backed stablecoins over central bank digital currencies from Europe or China due to greater trust in private-sector regulation in the US compared to risks of government control elsewhere.
Most stablecoins today are issued by private companies, backed by US assets like short-term Treasuries, and pegged to the dollar. The total supply of such tokens is projected to reach $3.7 trillion by 2030.
Chinese economists are increasingly calling for the development of yuan-linked alternatives. Shen Jianguang, chief economist at JD.com, warned that failing to develop stablecoins would mean China effectively withdrawing from the race for next-generation global currency dominance and handing that position to others.
JD.com founder Richard Liu reportedly informed staff of plans to apply for stablecoin licenses in all major markets to reduce cross-border payment costs by 90% and shorten settlement times to under 10 seconds.
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