While China has a blanket ban on cryptocurrency in general, Chinese tech giants like JD.com and Alibaba-affiliated Ant Group are urging the People’s Bank of China (PBOC) to authorize the creation of stablecoins backed by the offshore yuan.
Reuters reports that tech firms have proposed launching yuan-pegged stablecoins in Hong Kong as a strategic response to the growing global influence of U.S. dollar backed digital currencies. One of the primary goals remains promoting the international use of the Chinese currency while countering the dollar’s dominance in digital finance.
The urgency also comes from Hong Kong racing against the United States to establish a robust regulatory framework for stablecoins.
If the People’s Bank of China heeds these requests, it will represent a significant shift in China’s stance on cryptocurrencies, which have been banned domestically since 2021.
Experts also say it could reshape Beijing’s broader strategy to promote the yuan’s role in the international financial system.
Stablecoins are digital tokens tied to liquid assets such as fiat currencies or gold. Backed by blockchain technology, they enable instant, low-cost, cross-border payments, challenging traditional financial systems.
JD.com and Ant are already preparing to launch stablecoins linked to the Hong Kong dollar under new regulations set to take effect on August 1.
However, in recent closed-door meetings, JD.com reportedly emphasized to the central bank the urgent need for offshore yuan-based stablecoins to further yuan internationalisation efforts.
Wang Yongli, co-chairman of Digital China Information Service Group and former vice president of the Bank of China, warned in April that the global rise of dollar backed stablecoins poses a strategic threat.
“If cross-border yuan payments remain less efficient than dollar stablecoins, it will be a long term risk,” Wang reportedly said.