China is facing mounting calls from senior policy advisers and economists to adopt stablecoins for cross-border payments as the United States moves to strengthen the dollar’s global influence through the same emerging technology.
Despite a longstanding ban on cryptocurrency activities, recent comments from top People’s Bank of China (PBOC) officials indicate that Beijing may reconsider stablecoins as an alternative channel for global transactions.
PBOC Governor Pan Gongsheng stated in June that stablecoins could transform international finance by offering a resilient alternative to conventional payment systems, which he warned can be weaponized during geopolitical disputes.
Speaking at the same forum in Shanghai, former central bank head Zhou Xiaochuan noted that dollar-backed stablecoins could accelerate global dollarization. Other financial authorities from mainland China and Hong Kong emphasized that developing yuan-linked stablecoins could support China’s strategic objective of expanding the yuan’s global footprint.
China has historically resisted cryptocurrencies, citing risks to financial stability and capital controls. However, Morgan Stanley analysts argue that the shifting landscape now presents China with an opportunity to pilot offshore yuan stablecoins via Hong Kong, allowing the country to comply with capital restrictions while testing digital asset infrastructure.
“Stablecoins are not new currencies, but a new distribution mechanism for sovereign money,” said Robin Xing, Chief China Economist at Morgan Stanley. Xing stressed that China must engage with sovereign currency tokenization to remain competitive in digital financial systems.
The renewed debate follows the US Senate’s recent passage of a bill regulating stablecoins, which Treasury Secretary Scott Bessent claims will reinforce the dollar’s status in global trade. Bessent said global users trust US-regulated private stablecoin issuers more than government-controlled digital currencies.
Global stablecoin transactions have grown sharply in recent years, although they remain smaller than traditional payment flows. Projections indicate total stablecoin supply could reach $3.7 trillion by 2030, with the vast majority pegged to the US dollar and backed by American assets.
Major Chinese corporates are also preparing to participate. JD.com’s chief economist Shen Jianguang warned that China risks losing its competitive edge if it does not develop a yuan stablecoin alternative. JD.com founder Richard Liu told employees the company intends to seek stablecoin licenses across major markets to cut cross-border payment costs by 90% and reduce settlement times to under 10 seconds.
In parallel, Hong Kong has introduced its own stablecoin licensing framework to attract issuers, with JD.com, Ant Group, and Zhejiang China Commodities City Group Co. among the first expected applicants.
China’s official state-backed digital currency, the e-CNY, has yet to gain significant traction globally, while the mBridge cross-border payment initiative faces challenges after the Bank for International Settlements suspended participation over sanctions concerns.
Analysts say Beijing could adopt a dual-track approach, combining traditional yuan internationalization tools such as CIPS and currency swaps with pilot offshore stablecoins to hedge against the dollar’s expanding digital reach.
Pan Gongsheng has announced plans to set up an international e-CNY center in Shanghai to reinforce China’s commitment to digital finance as the global stablecoin market matures.
China’s next steps in stablecoin development will be closely watched by markets as digital tokens continue to reshape cross-border settlement and test the resilience of traditional monetary systems.
