The Central Bank of China "urges" the government to explore stablecoins! The cryptocurrency ban is shifting, and the global race is on to see who breaks through first?

In the summer of 2025, a global financial competition surrounding stablecoins is heating up at an unimaginable pace. As the U.S. Senate historically passes the GENIUS Act, paving the way for the compliance of U.S. dollar stablecoins, and causing the stock prices of issuers like Circle to soar, a strong shockwave also crosses the Pacific, triggering a profound reflection and anxiety from top to bottom in China, which has imposed the strictest bans on Crypto Assets. From the first public mention by the Governor of the People's Bank of China to the former governor's warning against "dollarization", and the high-profile announcements by business giants JD.com and Ant Group applying for stablecoin licenses, a major debate on "how to respond to the impact of dollar stablecoins" is rapidly unfolding in China's political, business, and academic circles. This is not just a discussion about technical routes, but a strategic shift concerning future monetary sovereignty and global financial discourse power. In this global competition that has already begun, who can break through first? The "yangmou" of the United States What ignited this storm is the U.S. "GENIUS Act." The passage of this act signifies far more than just bringing regulatory certainty to the Crypto Assets industry. In the eyes of policymakers and analysts in China, this is a meticulously designed "open scheme," whose core objective is to leverage the emerging tool of stablecoin to seamlessly extend the hegemony of the dollar from the traditional financial system into the vast realm of the digital economy. Morgan Stanley's analysis points out that stablecoins are not a brand new currency, but rather a "new distribution channel" for existing sovereign currencies. Currently, the global stablecoin market capitalization has exceeded $260 billion, with as much as 97% pegged to the US dollar. This means that every cross-border payment, transaction, and settlement involving stablecoins essentially expands the influence of the US dollar and indirectly increases the demand for US Treasury bonds. The report from China International Capital Corporation (CICC) also expresses similar concerns, believing that this will further consolidate the global status of the dollar. For China, which is striving to promote the internationalization of the renminbi, falling behind in the competition for stablecoin as a digital infrastructure will undoubtedly pose a significant risk of being marginalized. The shift of the East In the face of the increasing pressure from the United States, signs of a loosening of the long-standing "iron curtain" on the ban of Crypto Assets in China have begun to emerge. A series of statements from high-level officials indicate a subtle shift in policy direction: A rare statement from the central bank's senior leadership: In June 2025, Pan Gongsheng, the governor of the People's Bank of China, publicly mentioned stablecoins for the first time at the Lujiazui Forum, acknowledging their potential in reshaping traditional payment systems and shortening cross-border payment chains. He specifically pointed out that emerging technologies help address the risks of traditional payment systems being "politicized" and "weaponized," which has been interpreted by the outside world as a subtle response to U.S. financial sanctions. Former central bank governor Zhou Xiaochuan even issued a direct warning, stating that dollar stablecoins could accelerate the global process of "dollarization," and that China must respond early. Corporate giants are quick to respond: the business world reacts more swiftly. E-commerce giant JD.com and Ant Group, the fintech giant under Alibaba, recently proposed in a private meeting with the People's Bank of China to authorize the issuance of a stablecoin based on offshore renminbi in Hong Kong. They argue that this will help enhance the role of the renminbi in global trade and reduce the dominance of the US dollar. It is reported that regulatory bodies have responded positively to this proposal. A collective call from academia and think tanks: Many top scholars and national think tanks, including Li Yang, former vice president of the Chinese Academy of Social Sciences, and Deng Jianpeng, a professor at the Central Political and Legal University, have issued statements urging China to adjust its policies on Crypto Assets. They believe that China should actively participate in rule-making while adhering to the bottom line of financial security, in order to avoid missing out on the opportunities presented by the technological revolution. A clear consensus is forming: in the face of the stablecoin wave, China can no longer remain aloof. If lobbying efforts are successful, this will mark a significant policy shift for China since the 2021 ban on Crypto Assets and may suggest a broader strategy to enhance the international influence of the renminbi through digital finance. However, considering the strict capital controls in mainland China and the high emphasis on financial stability, it is clearly unrealistic to directly open stablecoins domestically. Thus, Hong Kong's unique position is highlighted—it serves as both a "firewall" against risks and a "testing ground" for exploring innovation. The Hong Kong Monetary Authority has announced that the "Stablecoin Ordinance" will officially take effect on August 1, 2025, and will begin accepting license applications from issuers, making it the first financial center in the world to provide a clear licensing mechanism for stablecoins. It is worth noting that Hong Kong's regulatory framework applies not only to HKD stablecoins but also reserves space for the issuance of stablecoins pegged to other fiat currencies, including offshore RMB. In this regard, international investment banks such as Morgan Stanley generally believe that China may use Hong Kong as a pilot for offshore Renminbi stablecoins. The brilliance of this strategy lies in: Risk Isolation: Relying on Hong Kong's independent financial system, the issuance and application testing of stablecoins can be conducted without impacting mainland capital controls and financial stability. Leveraging Existing Advantages: Hong Kong has the world's largest offshore renminbi fund pool (around 1 trillion RMB), providing a solid liquidity foundation for the issuance of offshore renminbi stablecoins. Exploring New Paths for Renminbi Internationalization: By issuing offshore renminbi stablecoins in Hong Kong, a new cross-border payment path can be explored that bypasses the traditional SWIFT system, offering a more efficient and cost-effective solution, thus providing new momentum for the internationalization of the renminbi. Who can break through in the global competition? Despite the changing policy direction in China, there are still numerous challenges to truly catch up or even break through. First, the US dollar stablecoin has a significant first-mover advantage and network effect, making it extremely difficult for the Chinese yuan stablecoin to compete directly in the short term. Secondly, as Morgan Stanley points out, the fundamental obstacle to the internationalization of the Chinese yuan is not just the lagging payment infrastructure, but also the global market's confidence in the growth potential of the Chinese economy, as well as strict capital controls. Therefore, China's strategy is more likely to be an asymmetric and gradual approach. Liu Xiaochun, vice president of the Shanghai New Financial Research Institute, suggested that the primary purpose of the renminbi stablecoin should not be to directly compete with the US dollar stablecoin, but to serve the development of emerging economies and expand the usage scenarios of the renminbi in a more "organic" way. In summary, globally, stablecoins are undergoing a dramatic transformation from "wild expansion" to "institutional dominance." Major economies such as the United States, the European Union, Hong Kong, and South Korea are incorporating them into regulatory frameworks, marking that stablecoins are no longer marginal products of the crypto world but are seen as an important part of the future financial infrastructure. China's shift from strict prohibition to beginning to "urge" exploration is essentially a strategic reassessment driven by external pressure. This global competition triggered by the dollar stablecoin is not fundamentally about the Crypto Assets themselves, but rather a struggle for monetary sovereignty in the digital age. Although there are many challenges ahead, China has realized that the cost of being absent in this unavoidable competition will be unbearable. Utilizing Hong Kong as a strategic foothold to explore offshore RMB stablecoin may be a crucial step for China in this grand chess game. The ultimate outcome of this competition will not only reshape the global stablecoin market landscape but also profoundly impact the international financial order for decades to come.