China's tech giants lobby for offshore yuan stablecoin, sources say

LunaDigital Marketing2025-07-0440911

(Reuters) -China's tech giants JD.com and Alibaba affiliate Ant Group are urging the central bank to authorise yuan-based stablecoins to counter the growing sway of U.S. dollar-linked cryptocurrencies, people with direct knowledge of the discussions said.

The two firms propose China allow the launch of stablecoins in Hong Kong pegged to its offshore yuan to help promote global use of the Chinese currency and fend off the dollar's growing digital influence, the two sources said.

The moves come as Hong Kong races the United States in setting up a regulatory framework for stablecoins, competing for a greater reach in global digital finance and trade.

Their lobbying efforts, if successful, would mark a major shift in the way Beijing views cryptocurrencies, which it banned in 2021, and could reshape China's strategy in promoting international use of the yuan.

Stablecoins are digital tokens, in the form of cryptocurrencies pegged to liquid assets, so far mostly the U.S. dollar but also in some cases gold or other currencies.

Their underlying blockchain technology enables instant, borderless and round-the-clock transfer of funds at low cost, giving them the potential to disrupt traditional cross-border payment systems.

Both JD.com and Ant already plan to issue stablecoins backed by the Hong Kong dollar, after the island's new legislation takes effect on August 1.

But in closed-door discussions with the People's Bank of China, JD.com has argued that offshore yuan stablecoins are urgently needed as a tool to promote yuan internationalisation, the sources told Reuters.

Such a view has also been expressed by other industry players.

"The global expansion of U.S. dollar stablecoins is posing fresh challenges to yuan internationalisation," Wang Yongli, co-chairman of Digital China Information Service Group said in an article posted on his social media account last month.

"It would be a strategic risk if cross-border yuan payment is not as efficient as dollar stablecoins," said Wang, former vice head of Bank of China.

The PBOC, JD.com and Ant did not immediately respond to Reuters requests for comment.

DOLLAR DOMINATES

The global stablecoin market is currently small at about $247 billion, according to crypto data provider CoinGecko. However, Standard Chartered Bank estimates it could grow to $2 trillion by 2028.

Over 99% of stablecoins are U.S. dollar-denominated, according to the Bank for International Settlements.

China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflecting its weight as the world's second-biggest economy.

Story continues

One roadblock to this aim, however, is its reluctance to remove tight capital controls.

The yuan's share as a global payment currency fell to 2.89% in May, the lowest in almost two years, according to payment platform SWIFT. The dollar commands a 48.46% market share.

"China has reached a point where it can no longer avoid taking action," said Xiao Feng, chairman of Hong Kong-based crypto exchange operator HashKey.

Many Chinese exporters now use dollar stablecoins as "more and more overseas merchants are sending payments in USDT", he said, referring to the world's more popular stablecoin Tether.

Several exporters told Reuters capital controls at home, geopolitical tensions and the risks of currency volatility in smaller emerging markets have spurred the shift into stablecoins.

Crypto HK, Hong Kong's biggest crypto OTC exchange, said the monthly volume of trading in the USDT token by its Chinese clients for trade settlement purposes has jumped five-fold since 2021.

INEVITABLE?

Marking a major U.S. shift, President Donald Trump backed stablecoins days after his inauguration in January and is establishing a regulatory framework that helps legitimise dollar-pegged cryptocurrencies.

Even in China, where cryptocurrencies remain banned, policymakers are becoming increasingly interested in stablecoins.

PBOC governor Pan Gongsheng said last month the boom in digital currencies and stablecoins poses huge challenges to financial regulation.

PBOC advisor Huang Yiping told local media in a recent interview that an offshore yuan stablecoin in Hong Kong is "a possibility".

Ant is preparing to apply for stablecoin licences in both Hong Kong and Singapore, one of the sources said. Ant is also preparing for offshore yuan stablecoins, he said.

JD.com chairman Richard Liu has also disclosed plans to apply for such licenses in major currency countries globally, in a bid to facilitate foreign exchange and cross-border payment.

In discussions with the PBOC, JD.com argued a yuan-pegged stablecoin was needed because the Hong Kong dollar is pegged to the U.S. dollar, which does not help promote the yuan's use in trade, one of the sources said.

JD.com has proposed China allow yuan stablecoin issuance in Hong Kong, before expanding the pilot scheme to offshore markets within China's free trade zones, said a company source, adding the suggestion had been well received by regulators.

(Reporting by Reuters staff;Editing by Vidya Ranganathan and Sam Holmes)

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Bowen

The proposed introduction of offshore yuan-backed stablecoin by Chinese tech giants is a strategic move to advance the internationalization and stability needs for digital RMB, indicating Beijing's ambitious plans in promoting its domestic currency beyond borders through technology.

2025-07-09 23:32:28 reply
Royce

The reported push by China's tech giants for the development of an offshore yuan stablecoin highlights their ambition to expand financial services beyond national borders, with potential implications on both global blockchain adoption and monetary policies.

2025-07-09 23:32:58 reply
Olivia

A possible move by China's tech titans towards advocating for an offshore yuan stablecoin suggests a proactive attempt to expand the country’a digital financial sovereignty and enhance its global influence, albeit with potential regulatory hurdles still looming over such endeavors.

2025-07-10 16:16:33 reply
Kael

A suggestion by Chinese technology giants to advocate for the creation of a yuan-backed stablecoin could further stimulate interest in internationalization and fostering greater blockchain adoption amid an increasingly competitive global digital currency landscape, according sources.

2025-07-11 16:24:39 reply
Elise

A surge in interest by China's tech giants for offshore yuan stablecoins, as stated sources claim it to be the case of late, reflects their strategic vision and pursuit towards establishing a dominant position within digital currencies with potential global implications.

2025-07-14 19:40:12 reply
Glenn

The reported push by China's tech giants for an offshore yuan stablecoin underscores their ambition to extend the global reach of digital RMB, presenting both a challenge and opportunity at enhancing cross-border financial transactions.

2025-07-15 08:13:33 reply
Odessa

A report suggesting China's tech moguls are lobbying for an offshore yuan stablecoin signals a potential pivot towards digital financial innovation in the world’sbiggest currency market, highlighting both their ambitions and regulatory complexities amidst global de-dollarization trends.

2025-07-15 08:13:48 reply
Landry

The proposed campaign by China's tech giants to lobby for the offshore yuan stablecoin suggests a strategic move towards expanding their global financial influence, potentially challenging conventional systems while fostering digital innovation within its borders.

2025-07-22 04:56:43 reply
Cadogan

The push by China's tech giants for the creation of an offshore yuan stablecoin suggests a significant shift in digital finance that aims to strengthen their international reach and competitiveness, while also providing investors with another safe-haven asset amid global economic uncertainty.

2025-07-22 04:56:58 reply
Bethany

China's tech giants pushing for a stable offshore digital currency based on the yuan could potentially open up new avenues in global financial technology and expansion beyond China’ European markets, raising concerns about jurisdictional challenges.

2025-07-25 05:24:47 reply
Zinnia

The move by China's tech giants to advocate for an offshore yuan stablecoin, as cited from sources indicates a strategic endeavor aiming towards enhacing the internationalization of Chinese digital currency and potentially bolstering financial stability in global markets.

2025-07-25 05:25:02 reply

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