July 30, 2025
By Anjali Kochhar
While much of the world watched China’s bold push toward central bank digital currency, a quieter but more effective strategy has begun to unfold. As its digital yuan struggles to scale internationally, China is now pivoting toward yuan-pegged stablecoins to promote the renminbi and compete with the global dominance of the US dollar.
After years of state-driven trials and limited international uptake, the e-CNY hasn’t achieved the results Beijing had hoped for. In response, Chinese firms and regulators are increasingly leaning on offshore yuan-pegged stablecoins as a more flexible and market-driven alternative.
One of the most notable developments occurred in July when Conflux Network, fintech company AnchorX, and Eastcompeace Technology introduced a new stablecoin, AxCNH, pegged to the offshore yuan. This stablecoin is targeted at Belt and Road Initiative partner nations and promises secure, audited issuance aimed at simplifying cross-border payments.
Meanwhile, tech giants like JD.com and Ant Group are lobbying the People’s Bank of China to allow the issuance of offshore yuan stablecoins through Hong Kong. With Hong Kong’s new stablecoin regulations set to begin on August 1, these companies argue that yuan-based tokens would more effectively support China’s global economic ambitions than Hong Kong dollar-pegged versions.
A recent meeting of Shanghai’s state-owned asset managers to discuss policy strategies on stablecoins and crypto signals a significant shift in regulatory tone. Once averse to crypto innovation, China’s regulators are now acknowledging the growing strategic importance of stablecoins in global finance.
This policy pivot also aligns with broader national goals. The PBOC has already committed to expanding digital yuan infrastructure, including launching an international operations hub in Shanghai and increasing usage of the Cross-Border Interbank Payment System to counter reliance on the US-led SWIFT network.
The shift comes at a time when dollar-backed stablecoins dominate the global market, comprising over 99 percent of circulating supply. Chinese exporters are already increasingly settling trade using Tether (USDT) for speed and cost-efficiency, prompting authorities to find homegrown solutions to retain control and relevance.
Though regulatory, legal, and political hurdles remain, the momentum is clear. China is now embracing stablecoins not as an alternative to its CBDC ambitions, but as a necessary complement. With this recalibration, yuan-pegged stablecoins could emerge as the true vehicle for internationalising the renminbi.
China’s digital currency future may no longer hinge solely on its central bank, but on the strength and agility of its private fintech sector.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
