- JD.com and Ant Group are advocating for Yuan-backed stablecoins to challenge USD supremacy
- China is looking at offshore Yuan tokens amid a sharp decline in the currency’s global payment share
As the United States moves forward with the recently passed GENIUS Act, China’s tech giants are seeking to counterbalance the growing dominance of U.S dollar-pegged digital currencies.
China’s stablecoin push
According to Reuters, JD.com and Ant Group have urged China’s central bank to greenlight the development of Yuan-based stablecoins, particularly through Hong Kong.
These proposed stablecoins would be pegged to the offshore Yuan, aimed at increasing the global footprint of China’s currency while challenging the expanding digital influence of the U.S. dollar.
Despite China’s ambition to challenge the dominance of U.S.-backed stablecoins, catching up will be no easy feat though. Tether’s USDT and Circle’s USDC currently dominate a market where more than 99% of stablecoins are tied to the U.S. dollar, according to the Bank for International Settlements.
While the stablecoin market currently stands at a modest $247 billion, Standard Chartered believes it could surge to $2 trillion by 2028.
Execs weigh in…
Remarking on the same, Wang Yongli, Co-chairman of Digital China Information Service Group and former Vice Head of the Bank of China, said,
“It would be a strategic risk if cross-border yuan payment is not as efficient as dollar stablecoins.”
Echoing similar sentiments, Xiao Feng, Chairman of crypto exchange operator HashKey, added,
“China can no longer avoid taking action.”
What’s behind this push?
Thus, if China’s lobbying push succeeds, it would mark a notable policy shift since Beijing’s 2021 crypto ban and could hint at a broader strategy to boost the Yuan’s international relevance through digital finance.
However, China’s aspiration to elevate the Yuan as a global reserve currency continues to face significant hurdles, particularly due to the country’s tight capital controls.
Although China ranks as the world’s second-largest economy, the Yuan’s presence in global payment systems has diminished. In fact, it fell to 2.89% in May – Its weakest level in almost two years, as per SWIFT data.
On the contrary, the U.S. dollar still maintains a commanding 48.46% share.
What’s more?
Therefore, as dollar-backed stablecoins gain traction among Chinese exporters, many of whom now prefer USDT for cross-border settlements, tech giants like Ant Group and JD.com are accelerating efforts to issue their own stablecoins to reclaim monetary ground.
While JD.com plans to launch a Hong Kong dollar-pegged stablecoin by year-end, Ant Group is actively pursuing licenses in Hong Kong, Singapore, and Luxembourg to broaden its blockchain-based payment infrastructure.
These moves align with a broader push to counter the digital dollar’s growing dominance.
Here, it’s worth noting that these updates coincided with optimism around renewed U.S.–China trade talks. These recently gave Bitcoin a brief push to over $110k, although momentum cooled down amid a lack of tangible progress – Underlining the volatile backdrop for stablecoin geopolitics.
